What happened

Shares of Shopify (NYSE:SHOP) gained 12.9% last month, according to data provided by S&P Global Market Intelligence.

The stock has been on a tear lately, and investors had more to cheer about last month after another impressive earnings report in late April.

A young woman shopping online with a laptop.

IMAGE SOURCE: GETTY IMAGES.

So what

Shopify blew past analysts' estimates on the bottom line, with adjusted earnings coming in at $0.09 per share -- Wall Street had expected a loss of $0.04. The stellar earnings momentum was driven by robust top-line growth of 50% year over year.

Now what

Despite the sales momentum, two analysts downgraded the stock last month based on Shopify's high valuation multiple. Indeed, Shopify is trading in nosebleed territory, with a forward P/E of 322 and a price-to-sales ratio of 29. The stock is up a staggering 907% over the last three years and is already up 120% year to date.

The stock may cool off at some point, but the shares should continue to reach new highs over the long term. The company is starting to invest for international growth, and its current market value of $34 billion (total shares outstanding times the stock price) still seems on the small side for the massive opportunity the company has to help small businesses compete with large retailers around the world -- a revenue opportunity the company estimates at $70 billion.