Shopify Stock Could Run Higher, But Risks Remain

Canadian technology darling Shopify Inc. (TSX:SHOP)(NYSE:SHOP) has been on an absolutely incredible run in recent years. Investors who have stuck with this technology growth star have done very, very well in recent years. I think there’s a lot of room for continued growth, and do agree that as long as this company keeps exceeding the growth expectations placed on the company by the financial markets, this is a stock that could continue to outperform in 2021.

That said, as with other high-flying stocks that have seen their valuations balloon to extreme levels, risks do exist today. Any sort of miss in terms of expectations on a future earnings report could send shares markedly down. Investors require continued confirmation of this growth story, so Shopify will simply need to execute each and every quarter. There is therefore a significant amount of risk built into this company’s stock price from the impact negative news or headlines could have on this stock in the near-term.

Additionally, the jury is still out on whether we will see Shopify’s growth accelerate in a post-pandemic world. We’re still fighting off the pandemic, and lockdowns are still taking place around the world. Once we’ve got a firm handle on this pandemic, the degree to which shoppers will go back to their bricks and mortar shopping ways remains to be seen. However, this is a potential headwind Shopify investors need to factor into their models right now.

Invest wisely, my friends.