2024-07-18 22:08:49 ET
Summary
- Shopify's integrated platform is in a class by itself.
- It's market leadership, product line up and exceptional execution at scale are strong competitive advantages.
- Its Shopify Plus subscription product should continue to attract large enterprise clients with multichannel storefronts.
- Shopify's competitive advantages will ensure sustainable long-term revenue and earnings growth.
Shopify ( SHOP ) (SHOP:CA) has always executed well as one of the largest and fast -growing e-commerce integrated operations platforms. It was always valued at a premium. Is the premium justified now that Shopify's revenue growth has slowed to the low twenties? Should we pay 10X for 22% estimated sales growth or 60x for 30% adjusted earnings growth? As we see from the 5-year charts, Shopify at $65, is way below its 52-week high of $92, its P/E has also dipped from its high above $100 and its P/S ratio is far below the stretched multiples over 30, when it was growing much faster. Expensive, but relatively less expensive than it was in the past - the market has adjusted to slower growth....
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Shopify: The Market Leader Deserves A Premium