Shopify: Buy, Sell, or Hold?

Let’s dive into some of the catalysts and headwinds facing Shopify (TSX:SHOP), and whether this company can get back on its growth path.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

For investors seeking top growth stocks in this market, Shopify (TSX:SHOP) has remained a premier option to consider. The company’s previous growth rates have been impressive, and while growth has slowed, many long-term investors continue to hold onto shares of this Canada-based tech darling, for good reason.

Created with Highcharts 11.4.3Shopify PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Shopify is among the most dominant e-commerce platform providers, with a business model that’s worth considering. The company’s transaction-based fee model means that as more sellers join its network, and more transactions take place, the company should continue to see outsized top- and bottom-line growth.

Let’s dive into some of the key headwinds and catalysts behind this company moving forward.

E-commerce growth should remain strong

As more commerce takes place online, businesses will be forced to look at options like Shopify to accelerate into the future. The company’s business model aligns with strong secular trends that don’t show signs of slowing. Indeed, while pandemic comps were clearly hard to deal with, this is a space that’s returned to growth. In this regard, Shopify should benefit from future consistent growth in this space over time.

That said, if a recession is indeed around the corner, spending in all parts of the economy could slow. And while the secular tailwinds supporting a continued shift to e-commerce are likely to remain, lower absolute sales volumes across the economy could provide strong headwinds that could impact the company dearly.

Thus, I think the investing time horizon and expectations of where the economy is headed in the next few years are paramount to deciding whether this is a stock worth holding.

Growth remains intact

But regardless of where you think growth is headed moving forward, it’s clear Shopify’s past performance has been strong. The company’s 23% year-over-year revenue growth rate in Q1 of this year highlights the kind of growth many investors are after. Accordingly, if one expects the same tailwinds that have propelled this stock higher to remain in place, this is a stock that could have much more room to run from here.

Notably, Shopify’s merchant services solution rose in line with its top-line number to US$1.4 billion. The company’s subscription solutions revenue also surged by 34% year-over-year. Indeed, these high-margin segments of the company’s business are where many investors are focused, and they’re driving the majority of gains seen across this tech giant.

The verdict

Moving forward, I do expect to see some choppiness when it comes to Shopify. The company has grown to a size that’s going to make future hyper-growth rates difficult to achieve. Additionally, my base case is that we will see a recession over the next two years. So, for those with a near-term trading mentality, this likely isn’t the stock to own.

But for those with a longer-term investing time horizon, this is certainly a company I think makes sense to dollar cost average into over time. In my view, Shopify stock is a long-term buy at current levels, and a likely near-term hold here.

Should you invest $1,000 in Ci Financial right now?

Before you buy stock in Ci Financial, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Ci Financial wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Tech Stocks

A shopper makes purchases from an online store.
Tech Stocks

Buy the Dip on the Return of Recession Stocks?

If a recession comes back, there are some stocks that could fair well afterwards. And this is one of the…

Read more »

data center server racks glow with light
Tech Stocks

April Opportunity: Where I’d Invest $7,000 in These 3 Tech Stocks Right Now

These tech stocks have solid growth potential and are trading at discounted valuation, providing a solid buying opportunity in April.

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

If I Could Only Buy and Hold a Single U.S. Stock, This Would Be It

You don’t need 40 different stocks to build wealth. A few good ones can boost your portfolio, and this U.S.…

Read more »

cloud computing
Tech Stocks

2 Top Canadian Information Technology Stocks to Buy Right Now

These two Canadian information technology stocks are bargains amid the downturn in the broader market for long-term investors.

Read more »

A microchip in a circuit board powers artificial intelligence.
Tech Stocks

The Only 2 AI Stocks You’ll Need for Long-Term Growth

Here are two top Canadian tech stocks that could help you benefit from surging demand for AI technology and infrastructure.

Read more »

calculate and analyze stock
Tech Stocks

The Canadian Stock I’d Buy Every Time it Takes a Dip

The tariff wars have created a buy-the-dip opportunity for value investors. Here is a Canadian stock that is a buy…

Read more »

jar with coins and plant
Tech Stocks

The Smartest Growth Stock to Buy With $1,000 Right Now

Here's a fundamentally solid, dividend-paying growth stock you can buy on the dip now to hold for the long term.

Read more »

e-commerce shopping getting a package
Tech Stocks

Shopify Stock Looks Like a Buying Opportunity Today

Let's dive into the pros and cons of owning e-commerce platform provider Shopify (TSX:SHOP) in this current environment.

Read more »