Shares of Shopify (NYSE:SHOP) hit all-time highs two weeks ago, but a swift correction finds the dot-com darling kicking off this new trading week 17% below those peak levels. The sell-off is creating a tempting buying opportunity for investors that have missed out on one of last year's hottest stocks, but it's always difficult to time an entry point in a stock that's correcting. 

Let's size up where Shopify stands now, framing its fundamentals to see if this is truly the mother of all buying opportunities. Shopify may be shaking up e-commerce with its seamless path to get shop owners and aspiring entrepreneurs online, but let's figure out if its success as a platform can translate into market-thumping returns for today's opportunistic investors. 

Shopify CEO Tobias Lutke and Canadian Prime Minister Justin Trudeau at a Shopify media event.

Image source: Shopify. https://pbs.twimg.com/media/Dcs84osUQAE72VH.jpg:large

Into the shopping cart

Assessing the culprit in the recent sell-off is probably a good as place as any to start sizing up Shopify's prospects at current prices. Shopify seemed to be humming along two weeks ago. KeyBanc analyst Monika Garg boosted her price target on the shares from $170 to $182, lifting the stock to all-time highs. A day later, the stock peaked, and the day after that the Supreme Court crashed the party by siding with South Dakota in its battle against Wayfair

The Supreme Court ruled in favor of the state, requiring out-of-state e-tailers to collect state sales tax in transactions by South Dakota residents. The news sent a ripple through the pool of e-commerce stocks, Shopify included. South Dakota is just one state, but the precedent is now set for others to follow suit. Online retailers will now have to be on a more level playing field with local merchants, but there are so many more advantages to e-commerce than merely skimping on sales tax collections. 

Shopify's fortunes won't be defined by this decision, and the nearly 17% slide seems to be an overreaction. Baird analyst Colin Sebastian agrees. He put out a bullish report on a few of the leading e-commerce stocks including Shopify, arguing that the stocks should be bought on weakness. He sees other states pushing similar tax legislation, but between the larger selection available online, the convenience of shopping from anywhere, and the overhead cost savings the drivers of the internet revolution far outweigh the future state sales tax hit. 

Growing the number of storefronts it hosts to more than 600,000 earlier this year, Shopify is rolling along. Revenue skyrocketed 68% in its latest quarter, blowing past its conservative guidance. Until we see the fundamentals start to crack -- and we're talking about more than just a normal deceleration in a company's growth rate -- it's hard to bet against Shopify. The stock's valuation may not be a good fit for the timid, but it's hard to read these market overreactions as anything else than a compelling price point to either establish or build on an existing position.  

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Shopify and Wayfair. The Motley Fool has a disclosure policy.