Could Shopify (TSX: SHOP) stock still be a millionaire maker?
May 21, 2021 marks the fifth year of Shopify (TSX: SHOP) (NYSE: SHOP) debuted on the Toronto Stock Exchange and the New York Stock Exchange. If you were a regular TSX investor and bought 679 stocks worth $ 21,218.75, you would be a certified millionaire five years later with $ 1,000,696.62 in the bank.
On Friday May 21, 2021 Shopify was trading at $ 1,473.78 per share, which is 4,616% more than $ 31.25 on May 15, 2015. I guess many Canadians became millionaires because they believed in the potential growth of the e-commerce platform.
The largest publicly traded company on the TSX by market capitalization ($ 183.31 billion) started out as an online snowboarding equipment store. Given the many business improvements since half a decade ago, is Shopify still a millionaire maker if you were to invest today?
Shopify had humble beginnings and started out as Snowdevil in 2004. The founders used Ruby on Rails, an open source web application framework, to set up the online store to showcase snowboarding gear. Six years later, in 2010, the company launched a Build-A-Business competition, in which participants built businesses using the Shopify App Store.
After three years, Shopify Payments entered the scene. Merchants can accept credit cards without the intervention of a third-party payment gateway. Due to the successful launch of its iPad-centric point of sale system, which accepted credit card payments, Shopify received $ 100 million in Series C funding at the end of 2013.
The stage was set for Shopify to go public simultaneously on the US and Canadian stock exchanges on May 15, 2021. What made tech action more appealing was the decision to Amazon.com to shut down its Amazon Webstore services for merchants in September 2015. The American multinational technology company chose Shopify as its preferred migration provider.
TSX 30 List
The TSX launched TSX 30 on September 26, 2019. It features the 30 best performing stocks over a three-year period. Shopify was in second place. A year later, in the second edition of the flagship program, the e-commerce platform ranked first with its 1043% performance over three years. Ballard Power Systems was far behind with 459%.
Over the past three years, Shopify’s average annual revenue growth is 63.9%. In 2020, the year-over-year growth was 85.63%. For the first time since 2014, the company reported profit for the full year of 2020. Shopify’s net profit was US $ 319.5 million on revenue of US $ 2.9 billion.
Shopify doesn’t just sign small and medium businesses online; it also supports its business partners. Global-E online debuted on NASDAQ on May 12, 2021. Shopify purchased a US $ 193 million stake prior to the IPO in the US $ 4.47 billion direct-to-consumer cross-border e-commerce platform.
In early 2021, Shopify earned nearly $ 2 billion from To affirm IPO, also on NASDAQ. The latter is a partner of Shop Pay Payments, a “buy now, pay later” financing service for US merchants. Shopify owns an 8% stake in the fintech company.
Normalized growth rate
Shopify expects consumer spending to revert to retail and offline services once the economic environment improves due to ongoing vaccination campaigns. He also anticipates a normalized growth rate for e-commerce activities.
Nonetheless, management sees its revenue growing rapidly in 2021, albeit at a slower pace than in 2020. Investors should assess whether Shopify is worth buying at its current price based on the business outlook.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool service or advisor. We are Motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we’re posting sometimes articles that may not meet recommendations, rankings or other content. .
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of the board of directors of The Motley Fool. Silly contributor Christopher Liew has no position in any of the listed securities. David Gardner owns shares of Amazon. Tom gardner owns shares of Shopify. The Motley Fool owns stock and recommends Amazon, Shopify, and Shopify and recommends the following options: short calls January 2023 at $ 1160 on Shopify, long calls January 2022 at $ 1920 on Amazon, long calls January 2023 at 1140 $ on Shopify and short calls from January 2022 to $ 1940 on Amazon.