It's not often that a stock doubles in a year, but that's just what Shopify (NYSE:SHOP) stock did in 2017. In fact, it more than doubled, notching a 136% jump. The e-commerce platform company had a great, no, scratch that, an amazing year. The company is growing its customer base, enriching its platform, attracting more sales channels, and as a result is putting up solid double-digit growth on its top line. Read on to see how these factors make this a home run stock for investors.

SHOP Chart

SHOP data by YCharts

More customers

Shopify had over 500,000 customers as of Aug. 1, 2017, which is up more than 50% from the number it reported in September 2016. While growing the number of customers is important, Shopify has moved away from reporting on its customer numbers. The primary reason is that all customers are not created equal. With Shopify having subscription fees ranging from $9 to $2,000 per month, an overall number of customers doesn't really help investors translate to revenues or costs.

Fool.com writer Brian Stoffel wrote a great article detailing Shopify's customers in which he stated that "Shopify is in the business of catching black swans." The idea is that the more customers that join Shopify's platform, the more chances for Shopify to land huge long-term profitable customers. These positive black swans are a key reason why increasing customer numbers are great for the business of Shopify.

Man shopping for clothes on his tablet with a credit card in hand.

Image source: Getty images.

More capability

Shopify continued to improve its platform for merchants last year. Key capabilities added in 2017 included:

  • Point-of-sale credit card reader offered free to merchants.
  • Wholesale channel to allow Shopify Plus members to sell goods business-to-business in bulk at wholesale prices without a separate login.
  • Shopify Pay, which streamlines the checkout process for customers buying products from Shopify merchants.
  • Integration with DHL for international shipping and UPS network capabilities in 220 countries.

With these improvements, Shopify wants to make it easier for entrepreneurs to start, run, and manage an e-commerce business, and it's succeeding.

More sales channels

This year Shopify added eBay, Buzzfeed, Kik, linkr, and Wish to its list of sales channels available to merchants. Shopify now has over 20 sales channels which give merchants access to more customers in more places.

Artist's rendering showing merchants connecting to customers in many ways.

Image source: Shopify.

What makes this so powerful for merchants is that they can set up their products in one place (the Shopify platform) and connect to the sales channels they want with all the sales data in one place to easily understand their overall business.

More growth

Shopify reports revenue in two main segments:

  • Subscription solutions: The monthly fees collected from merchants.
  • Merchant solutions: The transaction fees collected from each sale on the platform and other services such as Shopify shipping, Shopify capital, and referral fees.

Both of these segments have been growing significantly in the past year.

Metric

Q4 2016

Q1 2017

Q2 2017

Q3 2017

Subscription solutions growth

63%

60%

64%

65%

Merchant solutions growth

108%

92%

86%

79%

Overall revenue growth

86%

75%

75%

72%

Data source: Shopify.

Subscription solutions growth has been consistently in the 60%-plus range. This growth is driven by attracting new customers and merchants "moving up" to higher-cost subscriptions packages.

The merchant solutions business is riding the wave of success of Shopify's merchants. More revenue in this category means that its customers are selling more. Merchant solutions revenue accounted for 53% of Shopify's revenue in the last four quarters.

The next inning

If you haven't yet invested in Shopify, have you missed the boat? I don't think so. My reasoning is that Shopify's momentum is adding energy to its flywheel. When Shopify makes improvements to its platform, it attracts more merchants. More merchants make more sales, which attracts more sales channels, partners, and more capabilities created for the merchants. All of which make the platform more valuable, which then attracts more merchants to the platform. This will provide benefits to Shopify investors for years to come -- and I'd call that a home run.

Brian Withers owns shares of eBay and Shopify. The Motley Fool owns shares of and recommends eBay and Shopify. The Motley Fool has a disclosure policy.