Technology investors looking for the next great technology company may have found it in Shopify Inc. (TSX:SHOP)(NYSE:SHOP). The e-commerce company has seen its share price skyrocket nearly 140% since the beginning of the year, and nearly 300% since its initial public offering (IPO) just a little more than two years ago.
In this time frame, the company has done some remarkable things, continuously beating analyst expectations quarter after quarter, growing earnings by near-triple digit amounts each and every quarter, subsequently trimming the company's net loss in a bid to become profitable within the coming year. A technology company with vast growth potential and the ability to significantly out perform its peers, Shopify stands to be one of the few debt-free tech names with lightning speed growth available on the market over the next few years.
One thing most analysts and investors will agree on is that while some tech trends come and go, the e-commerce growth trend is one which is likely here to stay, supporting a more robust long-term growth rate than is likely to be seen in nearly any other industry, including the broader tech market.
Shopify's ability to monetize a significant percentage of its potential and continue to add on merchants to its platform is truly remarkable, given the breadth of options available to merchants looking to supplement their bricks-and-mortar business model with an e-commerce component.
The current base of hundreds of thousands of merchants is impressive, and although the company's customer base continues to grow stronger by the quarter, the company will need to continue to innovate and find ways of generating growth moving forward. Crossing the chasm and becoming the only site e-commerce merchants go to is going to be the next challenge for Shopify, one which many investors believe Shopify's management team is more than able to conquer.
We have not yet see the law of diminishing marginal returns take hold with Shopify, and whether the tech company will be able to continue to grow at the same lightning fast speed remains to be seen. If there is a company that can get it done, however, Shopify seems to be up to the task.
Invest wisely, my friends.
