Why Shopify Stock Could Be A Strong Buy For Long-Term Investors

Shopify Inc. (NYSE: SHOP) is a Canadian multinational e-commerce company that provides an online platform for businesses to create and manage their own online stores. The company has been growing rapidly since its founding in 2006 and has become one of the most popular e-commerce platforms in the world, with more than 1.7 million businesses using its services as of 2021. Shopify’s stock has also been on a tear, rising more than 3,000% since its IPO in 2015. In this article, we’ll take a look at why Shopify stock could be a strong buy for long-term investors.

Strong Business Model

Shopify’s business model is one of the key reasons why the company has been so successful. The company provides an easy-to-use platform that allows businesses to create their own online stores quickly and easily, without needing any technical expertise. Shopify’s platform also provides a range of tools and features that make it easy for businesses to manage their stores, including inventory management, order fulfillment, and payment processing.

In addition to its core platform, Shopify has also built an ecosystem of apps and services that help businesses grow and succeed. This includes a range of marketing and advertising tools, as well as integrations with popular social media platforms like Facebook and Instagram.

Rapid Growth

Shopify’s rapid growth is another reason why the company could be a strong buy for long-term investors. The company has been growing at a breakneck pace for the past several years, with revenue increasing from $205 million in 2015 to $2.9 billion in 2020. The company’s revenue growth has been driven by a combination of new customer acquisition and increasing revenue per customer.

One of the key drivers of Shopify’s growth has been the rapid shift to e-commerce that has been accelerated by the COVID-19 pandemic. As more and more people have shifted their shopping online, businesses of all sizes have been forced to adapt to the new reality. This has led to a surge in demand for e-commerce platforms like Shopify, which has been well-positioned to capitalize on this trend.

Innovative Culture

Shopify’s innovative culture is another reason why the company could be a strong buy for long-term investors. The company is known for its forward-thinking approach to product development and its willingness to experiment with new ideas. This has led to the creation of a range of innovative products and services, including its augmented reality (AR) shopping platform and its recently launched Shop Pay Installments feature.

Shopify has also been investing heavily in research and development, with the company’s R&D spend increasing from $84.5 million in 2018 to $211.5 million in 2020. This focus on innovation and R&D is likely to pay off in the long run, as it should help the company stay ahead of the curve in an increasingly competitive e-commerce market.

Conclusion

In summary, Shopify is a rapidly growing e-commerce company that could be a strong buy for long-term investors. The company has a strong business model that has proven to be highly successful, and it is well-positioned to capitalize on the continued shift to e-commerce. Additionally, Shopify’s innovative culture and focus on research and development should help the company stay ahead of the curve in an increasingly competitive market. As always, investors should conduct their own research and due diligence before making any investment decisions.