What happened

Shares of Shopify (NYSE:SHOP) climbed 187.2% last year, according to data provided by S&P Global Market Intelligence. That compares to a return of 28.9% for the S&P 500 index. The index return is stellar, but it looks like a flat line next to Shopify's.

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The company's bull run over the last few years makes most growth stocks look like value traps. Two ingredients for its incredible performance have been a massive opportunity in global e-commerce and a string of quarters with blistering growth rates on the top line.

Through the first three quarters of the year, revenue surged 47% year over year -- very typical for this company. Shopify is on pace to generate revenue of more than $1.5 billion for the full year, but investors see much more potential given the tiny share it holds of the global e-commerce market. 

A woman holding a credit card while using a laptop computer.

Image source: Getty Images.

So what

Shopify now has more than one million merchants on its platform. Subscription solutions revenue was up 37% year over year in the third quarter, but also encouraging was an increase of 50% in merchant solutions, including revenue from Shopify Capital, Shopify Shipping, and payment processing fees.

Now what

One of the notable developments recently has been international growth. Given the success Shopify has enjoyed so far serving merchants in North America, there must be even more merchants overseas who would find value in the platform. On that note, Shopify noted last quarter during the earnings call that most of its new users joining the platform were from outside the company's core geographies. 

Shopify is investing heavily in international expansion and new services. The Shopify Fulfillment Network is in development and will provide merchants a fast and affordable solution to ship orders to customers. As part of the fulfillment effort, Shopify acquired 6 River Systems last year, which enhances its capability in this area. 

Given the enormous opportunity here, it's understandable that Shopify hasn't reported a profit yet, as it chooses to reinvest for global expansion. The company expects to report a net loss of $158 million to $168 million for 2019. But since Shopify's business is built around recurring revenue from subscriptions and payment fees, it should have no problem eventually turning a profit down the road.