Shopify (NYSE:SHOP) has seen fantastic growth since its IPO in 2015.

In this clip from Industry Focus: Tech, Motley Fool analyst Sarah Priestley talks about what makes the company such a compelling buy for long-term investors and a few important risks that investors should be aware of before buying in.

A full transcript follows the video.

This podcast was recorded on Feb. 10, 2017.

Sarah Priestley: The crux of my argument on Shopify is basically that it's a really comprehensive platform. So, you can grow from being a tiny start-up to a multibillion -- no, multimillion. I'm pretty sure they don't have any billion-dollar companies on there yet. But they completely offer everything, and that cradle to grave functionality is incredibly rare, and I would say that is, probably, their biggest competitive advantage. The company is yet unprofitable, and that's something that you really need to bear in mind. If you invest in them, you're investing in their growth story. They intend to grow in two ways -- that's to grow the number of merchants that they serve and to grow the amount of revenue that those merchants transact.

The last one is long-term instrumental to their success because it's symbiotic. If they can offer their merchants this full suite of products to make them successful, their ecosystem becomes super sticky, the customers are unlikely to leave. And as they grow, Shopify grows, which is the perfect recipe. So, Lütke is aware of this, and he frequently references investments to help merchants sell better. You often hear this, "meet merchants where they are" or "meet customers where they are." This is the definition of this. He says they have launched Apple Pay, [...] Messenger, and a brand-new Shopify app that lets merchants set up and run their entire business from their mobile phone. And this is what they've done recently. So, all these investments are to bolster the offering, continually, that they have for their customers, and to stay ahead of the game.

And as far as the opportunity to grow their base, their addressable market is absolutely phenomenal. According to a 2014 survey -- that sounds outdated, but it's the most comprehensive recent study -- there were 47 million small-to-medium businesses globally, and 10 million operate in Shopify's core markets. So, bear in mind, they have a little over 325,000 merchants right now. That is a tiny fraction of their potential market, in a really growing space. The e-commerce space grew 11% in the first half of 2016. Experts estimate that in just the holiday season, e-commerce is going to grow by 11% to almost $100 billion.

Gaby Lapera: That's crazy. I saw a study the other day saying that for every $4 spent in America, $1 is spent on Amazon in America.

Priestley: Amazon is the top dog in this arena, and Shopify is, I guess, a competitor for them, even though they share some similarities.

Dylan Lewis: And actually, for as much as we think about e-commerce being pretty ubiquitous and something that we interact with all the time -- I mean, I order stuff off of Amazon all the time -- its penetration is actually fairly low, especially worldwide. I think it's somewhere in the single digits or very low double digits. This is still, in a lot of ways, a trend that has a huge runway.

Priestley: It really does. And I feel like we're in the kind of cycle where small-to-medium businesses are being empowered, people are focusing on craft. If you look, Etsy (NASDAQ: ETSY), Pinterest, and those kinds of small organizations that are really fostering individual entrepreneurs, it's all working together. And I really feel like Shopify has the platform, as you can see, Tesla has their storefront with them, they can go all the way through the spectrum of different business sizes. So, personally, I think that what they offer is really compelling. And they increased their number of merchants 60% year over year last quarter, so obviously there's a lot of people that agree. Their merchandise volume 100% increase year over year. They're making some fantastic momentum.

Sarah Priestley has no position in any stocks mentioned. Dylan Lewis owns shares of Tesla. Gaby Lapera has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Etsy, Shopify, and Tesla. The Motley Fool has a disclosure policy.