Many tech platforms come and go, but few convert tech into a responsible business. Shopify (TSX: SHOP) is one of them. It successfully made a place for itself in the e-commerce landscape dominated by Amazon and Alibaba. The ride was never smooth for Shopify. The 2022 tech stock meltdown was one of its worst setbacks. To build an end-to-end solution, Shopify launched a logistics business. However, logistics was asset-heavy and didn’t align with Shopify’s asset-light model. While the idea was strategic, the timing was bad.
A logistics business needs a certain scale of regular order volumes and cash flow to make economic sense. The 2021 pandemic rally pulled 10 years of future growth into a single year. However, the end of lockdown in November 2021 and the interest rate hike in April 2022 pushed growth into the future.
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Shopify has earned a permanent spot in my portfolio
Slow, resilient growth is always better and stronger than quick, windfall growth. Shopify has moved past the windfall growth, offloaded its logistics business, and achieved resilient growth over the last three years. The e-commerce platform has turned its operations profitable and reported a double-digit free cash flow margin in the last 12 quarters.
| Year | Shopify Revenue ($ millions) | YoY Growth |
| 2019 | $1,578.20 | 47.1% |
| 2020 | $2,929.50 | 85.6% |
| 2021 | $4,611.90 | 57.4% |
| 2022 | $5,600 | 21.4% |
| 2023 | $7,060 | 26.1% |
| 2024 | $8,880 | 25.8% |
| 2025 | $11,556 | 30.1% |
The above table shows how Shopify’s revenue growth rate accelerated, slowed, and is now gradually accelerating without any external catalyst, like the pandemic. This has earned Shopify a permanent spot in a long-term portfolio.
The resilient growth of Shopify
Shopify’s resilient growth in the last three years came despite geopolitical tensions, tariff wars, and the AI boom disrupting trade, making goods expensive, and cutting IT jobs. Despite the chaos, Shopify’s gross merchandise volume (GMV) kept growing. Its revenue from apps, themes, domains, and other platform fees increased, hinting that existing customers expanded their Shopify stores.
Shopify used AI to help customers shop for the right products and help merchants target the right customers. AI also partly contributed to accelerated revenue growth.
How to maximize returns from this growth stock
Despite global expansion, Shopify experiences seasonality. The holiday season continues to be its strongest, and March its weakest. Shopify’s share price tends to rally from October to February and fall between March and June. For such a seasonal stock, profit booking and reinvesting can help compound returns when done in a Tax-Free Savings Account (TFSA).
You could consider buying Shopify stock between March and June. Suppose you invested $10,000 in April when the shares traded at $163; you would own 61 shares. Shopify tends to give a 50% capital appreciation during the holiday season. Add 50% to $163; you could consider selling 30 shares for $240–244. Why sell only half the holdings?
Consider retaining 50% of the shares for long-term growth and using the remaining 50% for booking short-term profit. If you sell 30 shares for $240, you will get $7,200, which means a $2,200 capital gain. And since the profit booking is happening in a TFSA, the gain is tax-free. You can use this money to buy more Shopify shares in April. If you buy more shares at $170 per share, you can buy 42 shares. You sell 30 shares and buy 42 shares, making 12 shares free.
| Month | Share Price* | Shares Purchased | Shares Sold | Shares Owned | Investment Amount | Sales Proceeds | Investment Value |
| Apr-26 | $163 | 61 | 61 | ($10,000) | $10,000 | ||
| Feb-27 | $240 | 30 | 31 | $7,200 | $7,440 | ||
| Apr-27 | $170 | 42 | 73 | ($7,200) | $12,410 |
In some years, even the holiday season may pull down the share price. Understand the reason for the downturn, whether it is short-term or long-term, and buy more shares at the dip. This way, you can accumulate a sizeable number of shares through compounding without investing much.
