Shopify (TSX:SHOP) is likely one of the largest e-commerce platform suppliers on this planet and one of many high progress shares within the Toronto Inventory Change. Since its lows in 2022, the corporate has seen exceptional progress, greater than tripling to present ranges.

After such an increase, some traders might definitely be cautious of the corporate’s upside potential. That stated, I feel extra upside might be in retailer for traders searching for a high progress inventory to purchase to experience this wave of momentum increased.

Right here’s extra on why I feel Shopify is a high Canadian progress play price contemplating proper now.

Robust and rising core enterprise

Shopify generates its money stream and earnings by way of transaction charges charged for companies utilizing its platform to conduct enterprise in addition to by way of software-as-a-service income for different providers offered by the corporate. These money flows have confirmed to be resilient and steady, permitting progress traders a transparent line of sight to future profitability primarily based on market share growth metrics and different forecasted measures.

In fact, the pandemic-related growth was a one-off, and Shopify inventory did decline following that time period because the comps generated progress hurdles that had been unattainable to beat. The factor is, Shopify’s progress has remained regular (when zooming out), and the secular tailwinds supporting its enterprise (extra small- and medium-sized companies taking over on-line shops) proceed in earnest.

Shopify’s progressive expertise permits retailers to design, handle, market and promote their services and products extra effectively. That’s a enterprise mannequin that’s more likely to final by way of a number of market cycles and is the important thing cause this can be a progress inventory I proceed to concentrate on.

Robust outcomes

A powerful forward-looking progress image is one factor, however traders wish to see the cash now. By way of Shopify’s current outcomes, it’s been bringing house the bacon, with year-over-year income progress of 26% in 2023 and bottom-line progress of 28%. This means continued margin growth — one thing traders proceed to wish to see from Shopify.

Shopify’s share worth has reacted positively to most of its current quarterly reviews for that reason. The corporate is seeing higher progress from its higher-margin subscription enterprise, and the corporate has quite a few verticals to increase into to develop its total income and earnings base additional.

Why Shopify stays a purchase

Shopify’s established nature as a key supplier of key infrastructure for e-commerce retailers in North America is well-known. Nonetheless, the corporate additionally has ample alternative to proceed increasing its presence globally, with quite a few key markets but to be explored. Whereas the corporate has a 15% penetration price by way of e-commerce in North America, its penetration price globally is at 2%, with 0.5% of all retail gross sales going down over its platform.

• We simply revealed 5 shares as “greatest buys” this month … be a part of Inventory Advisor Canada to search out out if Enbridge made the record!

So, because the pie expands and Shopify continues to gobble up extra market share, there’s a robust progress image forward. With incredible fundamentals and rising profitability, traders ought to anticipate continued upside from right here. No less than, I do.