Hey there,
First off, I've own Shopify for years and continue to own it. It is an industry leader and a global company trading on the TSX - which is always nice. That said, it is not a cheap stock and one that you'll have to expect volatility.
Shopify has 2M+ merchants on its platform as gross merchant volume (GMV) has soared. Analysts expect GMV to rise from $197B as of end of Fiscal 2022 to ~$270B in Fiscal 2024. It also has several integrated merchant solutions such as payments, POS and Shopify Capital, all of which adds to the platform 'stickyness'. It also enables multi-channel selling as merchants can list products on third-party marketplaces like Instagram and TikTok.
Recently, the company announced it was selling its logistics business - this is viewed as a positive and will make Shopify a more asset-light company. Notably, the agreement with Freeport (the buyer) also calls for a revenue share, so Shopify is still benefiting.
That said, this past year the company generated negative cash flow and while it has returned to positive cash flow growth in 2023, it is something to monitor as the retail environment becomes more difficult amid a period of high inflation. While the company is still posting double-digit revenue growth, it is still struggling with profitability. Analysts are estimating FY profitability this year and the next but expect it to be highly volatile as it is still in high growth mode.
As mentioned, I own the company and still like it but do expect there to be continued big swings up and down.
Mat