Shopify Inc. has shown remarkable growth in the e-commerce sector. Over the last two years, the company’s stock has doubled the performance of the Technology sector.
Shopify helps its clients grow both online and offline. It provides solutions for starting, selling, marketing, and managing businesses. The company’s services range from website creation to sales, payments, automation, inventory, and shipping.
Shopify’s client base includes entrepreneurs, small and mid-sized businesses, and large enterprises. The company focuses on empowering sellers and businesses, which has helped it increase its revenue from $1.1 billion in 2018 to $7.1 billion in 2023.
Shopify’s revenue comes from recurring subscription fees and various add-ons. In 2023, the company raised its subscription plan prices by about 30%, the first price hike in over a decade.
In the second quarter, Shopify’s Gross Merchandise Volume grew by 22% to $67.2 billion.
Shopify’s impressive stock performance
Gross Payments Volume reached $41.1 billion, 61% of GMV.
After adjusting for the sale of its logistics businesses, the company’s quarterly revenue increased by 21%, or 25%. Subscription Solutions revenue rose by 27%. Shopify is expected to grow its sales by 22% in 2024 and 20% in 2025.
This would increase revenue from $7.1 billion last year to $10.3 billion next year. Adjusted earnings will rise by 51% in 2024 to $1.12 per share. Since its IPO, Shopify shares have soared about 2,800%.
This has outperformed Amazon’s 800% rise and the broader Technology sector’s 300% increase. Shopify’s stock is currently trading roughly 50% below its 2021 peaks. Shopify has a strong balance sheet with $5 billion in cash and equivalents and $11.3 billion in total assets.
The company’s total liabilities are $2.2 billion. Investors may consider buying Shopify stock while it is still 50% below its peaks. The S&P 500 is trading near all-time highs.
Shopify remains a compelling investment in the evolving e-commerce landscape.
