A $10,000 investment in Shopify five years ago is now worth more than $280,000! And the vast majority of that increase came this year.
No question… I wish that I had bought shares of this company a few years ago. But would I buy shares today?
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Even when compared with some of the most expensive stocks in the world, Shopify is outrageously overpriced.
Not to change the topic here:
What Will Shopify Look Like In 2025? -- Trefis
Shopify (NYSE: SHOP) , a technology company that helps businesses get online by setting up e-commerce websites and handling related services, has seen its stock price rise by 2.5x this year, with its market cap standing at about $130 billion. The stock now trades at over 50x projected 2020 revenues and about 450x earnings. Does this make the stock expensive?
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Combine revenue growth with the fact that Shopify's margins (net income, or profits after all expenses and taxes, calculated as a percent of revenues) are projected to jump sharply from negative levels in 2019 to over 10% in 2020. We believe it's possible that Shopify's margins could expand further to close to 20% by 2025, driven by higher economies of scale and steadily higher margins for the fast-growing merchant solutions business.
Methods To Avoid Buying A Bubble (Shopify Example) (NYSE:SHOP) | Seeking Alpha
With that being said, followers of mine also understand that I approach investing with sobriety and focus on two primary tools: discounted cash flow models and projecting free cash flow.
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There must be nuanced understanding of 1) what the market is projecting in the way of growth, 2) the opportunity that lies ahead for the company, and 3) what management believes it can achieve.
Today, I will walk us through my philosophies around projecting intrinsic value and using that projection to generate alpha. To highlight my methods, I will value Shopify.
Shopify drives the 'new reality' of e-commerce - TechHQ
From garden centers to mom-and-pop grocery stores, those retailers who could take their businesses online amid widespread global lockdowns, did.
And there was no shortage of e-commerce solutions and platforms ready to help those businesses out, just about as quickly as they could start turning their storefronts into distribution hubs .
One of the biggest… Shopify. The Canadian e-commerce powerhouse nearly doubled its revenue in the second quarter of this year, with sales growing 97% year-on-year to hit US$714 million amid the coronavirus pandemic.
Many things are taking place:
The Results Are In: People Love To Shopify During A Pandemic 07/30/2020
Shopify, the Ottawa-Ontario based company that makes it easy for mom-and-pop retailers, ecommerce entrepreneurs and established brands alike to create shops and market their wares online, saw its revenues nearly double over the same period last year.
“Shopify, which was founded in 2004, is an e-commerce platform that sells businesses a variety of tools to make it easier to build, run and market their online stores. The company has benefited from consumers shopping online because of government-mandated lockdown measures that have forced businesses to close in-person retail,” Matt Grossman and Kimberly Chin write for The Wall Street Journal .
Shopify: The Canadian tech champion taking on Amazon
When the pandemic forced Pizza Pilgrims to close its 13 stores in London and Oxford in March, the business went from making 30,000 pizzas every week to zero. Of the 276 staff, 270 had to be furloughed.
While they opened one store in April to manage delivery, founder Thom Elliot still needed to find another way to make up for the lost revenue. "I tried to think of something that would serve our customers, who kept calling us, and also keep us relevant during these times," he says in an interview.
Shopify's Holiday Season Should Be Strong (NYSE:SHOP) | Seeking Alpha
Shopify has posted outstanding growth in GMV for the BFCM 4-day shopping period, with $2.9 billion+ in 2019 and $1.5 billion+ in 2018.
New merchants and new stores created have accelerated due to the pandemic, further adding to potential growth in GMV.
E-commerce is estimated to account for up to 30% of total sales this holiday season, doubling from last year due to changes in shopping trends.
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