Shopify (TSX:SHOP)(NYSE:SHOP) stock has posted incredible growth since its initial public offering back in 2015. Shares of the e-commerce giant have climbed 33% in 2021 as of late afternoon trading on July 30. Over the past five years, the stock has gone from a valuation under $50 to being valued over $1,860 at the time of this writing.
The company released its second quarter 2021 results on July 28. It achieved revenue of $1.11 billion, the first time in its history it had passed the billion-dollar threshold in a quarter. Gross profit dollars increased 66% to $620 million and operating income reached $139 million, or 12% of revenue. Moreover, adjusted net income hit $284 million or $2.24 per diluted share – up from $129 million or $1.05 per diluted share in the prior year.
E-commerce growth has erupted since the beginning of the COVID-19 pandemic. Predictably, this has given Shopify a boost. It achieved record sales numbers during the Black Friday-Cyber Monday holiday shopping weekend of 2020. Investors should expect another strong showing in 2021.
Despite this, Shopify’s gains have been somewhat muted in comparison to previous years. The stock’s high P/E ratio is still below the industry average. Shopify has hit the profitability milestone and its revenue growth has been very impressive. This is a pricey stock, but still well worth owning for the long term in an environment that will see e-commerce continue to expand its global reach among consumers.
