Up 45% in 2023, Is Shopify Stock a Buy Today?

A shopper makes purchases from an online store.

Shopify (TSX:SHOP) is, without a doubt, one of the most popular stocks on the TSX, especially among growth investors. There are many investors on either side of this company — the bears and the bulls — which leads to a lot of eyes on Shopify on a day-to-day basis. Over the past month, it appears that the bears may be a bit happier, with the stock dropping a bit in value. However, as the title says, the bears have had the last laugh so far, with Shopify stock gaining about 45% in 2023 so far.

With that said, is Shopify a buy today? Let’s take a deeper look at the company to determine whether investors should be buying this stock today.

A bit of a background on Shopify

A bona fide blue-chip stock, Shopify leads one of the most intriguing industries. It is one of the world’s largest e-commerce companies. Shopify provides merchants of all sizes with a platform and many of the tools necessary to operate online stores. In fact, Shopify’s service offering is so extensive that large-cap enterprises like Netflix have been known to use this company’s platform. It’s estimated that more than one million merchants around the world use Shopify to power their online stores.

How has the company performed?

In Shopify’s second-quarter (Q2) 2023 earnings presentation, the company reported US$1.7 billion in quarterly revenue. That represents a year-over-year increase of 31%. Those are very impressive figures for a company that many people think is past its best. A lot of Shopify’s revenue comes from recurring sources. This gives the company a very stable and predictable revenue base, which it can use to help fund growth in the future.

In the same earnings presentation, Shopify reported that it managed to bring in US$444 million in revenue just from subscription solutions alone. This is also very promising if you’re a prospective investor in this company because strong recurring revenue should be seen as a must for any stocks that are up for consideration in your portfolio. Over the past five years, Shopify’s monthly recurring revenue has grown at a compound annual growth rate of 32%.

These results may have had a hand in helping Shopify stock gain as much as it has so far this year. With a gain of 45% on the books so far, investors will hope to see it continue to soar through to the end of the year, thanks to its busiest season (e.g., the Christmas season).

Should you be buying this stock in October 2023?

In my opinion, Shopify would be a great addition to a growth stock portfolio. As mentioned previously, this company is a world leader in a very intriguing industry. In addition, although it’s a Canadian company, Shopify has managed to reach a type of global presence that very few Canadian companies have ever been able to do. That could give investors some exposure to different geographic regions, adding a bit of diversification to their portfolios.

In summary, Shopify is a tremendous company with an even more impressive global reach. It has been performing very well from a financial standpoint, and I think investors could do well holding it in their portfolio.

The post Up 45% in 2023, Is Shopify Stock a Buy Today? appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Shopify?

Before you consider Shopify, you’ll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in October 2023… and Shopify wasn’t on the list.

The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 25 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks
* Returns as of 10/10/23

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Fool contributor Jed Lloren has positions in Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Netflix. The Motley Fool has a disclosure policy.