Why Shopify Stock Is A Smart Investment For The Long-Term
Shopify is an e-commerce platform that provides tools for businesses to build and manage their online stores. The Canadian company has grown significantly in recent years, making it a popular investment choice for many investors. The company’s stock, traded on the New York and Toronto stock exchanges, has consistently shown strong growth over the past few years, making it a smart investment option for long-term investors.
In this article, we will explore the reasons why Shopify stock is a smart investment for the long-term.
Growing User Base
One of the primary reasons to invest in Shopify stock is the company’s growing user base. As of 2021, the company had over 1.7 million merchants on its platform, a 71% increase from the previous year. This growth is due to the company’s continued investment in expanding its product offerings, which include point-of-sale software, payment processing, and marketing tools.
Furthermore, Shopify has expanded globally, with a significant presence in the United States, Canada, and Europe. The company’s expansion into new markets, combined with its growing user base, provides significant opportunities for continued revenue growth.
Strong Financial Performance
Shopify’s financial performance is another reason to invest in the company’s stock. The company has consistently shown strong revenue growth over the past few years, with revenue increasing by 86% year-over-year in the first quarter of 2021.
Shopify’s revenue growth has been driven by the company’s subscription solutions and merchant solutions, which grew by 71% and 137%, respectively, in the first quarter of 2021. The company’s gross merchandise volume (GMV), which is the total value of goods sold on the platform, also increased by 114% year-over-year in the first quarter of 2021.
Shopify’s strong financial performance is a testament to the company’s ability to generate revenue and maintain profitability, which makes it a smart investment option for long-term investors.
Expansion into New Markets
As previously mentioned, Shopify has expanded globally, which has provided significant growth opportunities for the company. In addition to expanding into new markets, Shopify has also expanded into new product offerings, including point-of-sale software and payment processing.
One of the most notable examples of Shopify’s expansion into new markets is the company’s recent partnership with Walmart. The partnership allows Shopify merchants to sell their products on Walmart’s online marketplace, which provides significant opportunities for increased sales and revenue growth.
Resilience During Economic Downturns
Shopify has proven to be resilient during economic downturns, which is another reason to invest in the company’s stock. The COVID-19 pandemic led to an increase in e-commerce sales, as consumers shifted their purchasing habits online. Shopify was well-positioned to capitalize on this trend, as the company’s platform allows businesses to quickly and easily set up online stores.
Shopify’s ability to adapt to changing market conditions and capitalize on emerging trends makes it a smart investment option for long-term investors.
Conclusion
In conclusion, Shopify is a smart investment option for long-term investors due to its growing user base, strong financial performance, expansion into new markets, and resilience during economic downturns. As e-commerce continues to grow, Shopify is well-positioned to capitalize on this trend and continue its strong growth trajectory.
Investors should consider Shopify stock as part of a well-diversified investment portfolio, with a long-term investment horizon in mind. While the stock may experience short-term volatility, Shopify’s long-term growth potential makes it a smart investment option for those looking to invest in the e-commerce industry.
