1 Growth Stock that Could Be Bigger than Amazon

E-commerce entrepreneurs are familiar with Shopify. The company allows them to set up websites and cash in on the increasing interest in online shopping. Shopify gives the start-up a chance to make a name for its brand and develop a following.

Why Shopify Is Different

Shopify is distinct as it offers an ecommerce platform that enables e-commerce businesses to run their business in various promotional channels. These channels include storefronts backed by web and mobile platforms, pop-up shops, physical store locations, buy buttons, and native mobile apps.

How Shopify Improves Merchant Sales

Through Shopify, a merchants can do several functions, including:

  • Fulfill and ship orders
  • Oversee their stock and inventory
  • Manage payments
  • Attract and communicate with new buyers
  • Build their customer base
  • Source products and inventory
  • Assess and leverage reporting and analytics
  • Access financing

Shopify also sells customized themes and apps and registers domain names.

What Is Shopify’s Intrinsic Value?

Besides being a popular resource for entrepreneurs and e-commerce merchants, Shopify stock has enjoyed enormous growth over the years.

Based on a discounted cash flow forecast analysis, it is fully valued at $1,486 per share.

Shopify Competitors

Shopify challenges retail behemoths, eBay (EBAY) and Amazon (AMZN) in the digital marketplace.

While Shopify represents a high-quality and expensive stock, it is expected to generate high revenue and earnings growth for the foreseeable future.

Even during the COVID-19 bear market, Shopify hung in there, never losing its major levels of support. 

It competes with a list of well-funded, successful competitors, including:

  • BigCommerce
  • SquareOnline
  • Weebly
  • Wix
  • WooCommerce 

Shopify Market Share Remains Impressive

  1. Shopify highlights several drivers toward expansion, including its Payments offerings and its efforts toward international market growth.
  2. Shopify has 20% market share of online ecommerce
  3. Over 1 million businesses are served by Shopify
  4. Over the last 5 years, investors in Shopify have received returns of 3,000%.

11 Additional Reasons Why Shopify Could Become Bigger than Amazon

1. Shopify Has a Strong Customer Following

At this writing over 1 million vendors have already hopped onboard with Shopify and have entrusted the company to help them with the smooth-running of their business.

From the beginning, Shopify has made every effort to please its customers. Shopify makes it easy for customers to set up an ecommerce platform and scale it for growth.

2. The Company Features Innovations that Focus on Merchants

By using a cloud-based platform, Shopify can see what they can do to improve their customers’ experiences online. This lessens the hassle of managing an online store. Shopify even used COVID-19 as a way to improve its product offerings.

3. Company CEO Has 100 Year Vision

The CEO of Shopify, Tobi Lutke, is looking at the next 100 years, not just the next decade. This type of futuristic thinking is reflected in the company’s slogan, “To make commerce better for everyone.”

Shopify’s mission is to consider the commerce goals of this generation as well as the following generations of customers.

4. Shopify’s Financial History – Simply Amazing

The compounded annual growth rate (CAGR) is posted at 47% for Shopify. Its total revenue has increased 71% CAGR.

Shopify attributes this performance to its ability to serve small, medium, and large-sized businesses –  from sole entrepreneurs to worldwide enterprises.

5. Low Price, Easy Onboarding

Shopify makes it super quick and simple to open a Shopify store. The site offers 3 basic plans, all affordably priced. Businesses can also begin a trial for 14 days, with no credit card required. Plans include the following:

  • A Basic Shopify Plan, best used for new start-ups that have not sold anything online previously or are new to in-person sales. This plan is priced at $29.00 per month.
  • The Shopify Plan is aimed at expanding a business with just 1 retail store.This plan is priced at $79.00 monthly.
  • The Advanced Shopify Plan provides businesses with the means to start selling using 2 or more retail stores. It is priced at $299 per month.

6. Shopify Highlights Easy-to-Get Started Features

Whether a business is categorized as a large enterprise or a Mom-and-Pop business, it can get your store launched overnight with Shopify.

The company continues to release new services, tailored to different customers in its ever-expanding and massive marketplace.

7. Shopify Ecosystem

Shopify has aligned itself with professionals, such as marketers and website designers, who can offer their services to Shopify merchants.

The company takes a small cut of revenue for each app download in its apps store and a cut of revenue from its partner services, available to merchants through Shopify’s marketing platform.

8. Merchant Resources Enabled Shopify To Enhance Services Platform

Not only has Shopify’s merchant growth improved, the company’s ability to improve its website has given Shopify the ability to attract more sales channels and partnerships. This bodes well for merchants, as it gives them the ability to sell more products and add tools for increased efficiency.

Shopify’s growth flywheel has spun to the point it has created a ripple effect.  This opportunity gives rise to self-employment, and more opportunities for merchants to realize increases in gross merchandise value (GMV).

9. Shopify Is a Great Place to Work

Glassdoor’s yearly award for  “Best Place to Work in Canada,” went to Shopify.

The company ranked, on average, 4.5 out of 5 stars. About 80% of the reviewers on Glassdoor said they’d recommend Shopify as a place to work to friends.

10. The Company Has Scaled Itself to Handle Large Projects

Shopify launched its Fulfillment Network with $1 billion to pick, pack, and ship customer orders.

It followed up with Shopify Capital, providing close to $1.5 billion in merchant financing.

11. Shopify Has Begun Taking the Road Toward Consistent Profitability

After pouring earnings into expansion and growth and realizing incredible sales, Shopify has become profitable. Because of cost scaling, the company’s profitability forecast stands at just over 5% per year.

Conclusion

If you have not yet bought Shopify, you should add it to your portfolio. It can, indeed, one day, surpass Amazon in earnings. Buy the growth stock over time and let it do its thing. It no doubt can help support your financial legacy.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.