E-commerce platform Shopify (SHOP -0.84%) has been a tremendous performer during the pandemic, and its stock price has more than doubled since early this year. But at nearly $1,000 a share, is this young company really worth so much?

The story behind the company

Headquartered in Ottawa, Canada, Shopify is an e-commerce platform that supports more than 1 million businesses in 175 countries. Offering online storefronts and fulfillment services that make selling products online as painless as possible, Shopify hosts small and large brands alike, from Allbirds to Heinz and Staples Canada.

Man and woman managing stock for e-commerce shipping.

Image source: Getty Images.

Sales results are stellar

As an e-commerce platform, the general transition to selling online has benefited Shopify beyond a doubt. Total revenue surged 669% between 2015 and 2019. In recent quarters, Shopify has maintained its high-double-digit growth trend. Brick-and-mortar merchants rushed to subscribe to the platform during the pandemic, and the company further rocketed in value. 

Overall, Shopify has had excellent results: Sales rose in 2019 by 47%, and the trend is even stronger this year due to the pandemic tailwind. In fact, a record number of merchants upgraded their subscription plans in the second quarter of 2020, as gross merchandise volume jumped due to coronavirus restrictions on in-person shopping.

Shopify competes directly with Amazon's Marketplace, where over 1 million vendors sell third-party wares on Amazon's website. Shopify's fulfillment warehouse launch in 2019 has helped merchants easily manage and ship products just like Amazon. A further advantage might be found in Shopify's approach, however: Whereas Amazon unifies storefront and merchandise pages in an easy-to-use, centralized manner, Shopify hosts individual storefronts on its platform, enabling companies to customize their websites and promote their branding separate from Shopify. 

Other than navigating the payment portal, customers do not feel like they are interacting with Shopify at all. And that might make all the difference for merchants looking to build their online presence. 

But is it a fair value?

Shopify is growing rapidly, and its stock price reflects its popularity. The company's management has great vision, as evidenced by its ability to capitalize early on the e-commerce trend, and the company has been able to follow through on its plans. Morgan Stanley analyst Keith Weiss estimated that Shopify could sustain a 30% compound annual growth rate through the next 10 years, driving its revenue to $25 billion.

Glowing graph showing increasing revenues.

Image source: Getty Images.

But at nearly $1,000 a share, the company trades at 45 times its sales for the past 12 months. Amazon, another pandemic outperformer, trades for less than 5 times sales. So can Shopify really be classified as a good deal at current prices?

In fact, the company might be overpriced at the moment -- if you discount all of its ideas in the works. For example, Shopify recently rolled out a new initiative that seems all but guaranteed to bring in further sales. Teaming up with social media sites like Pinterest and Facebook, Shopify is powering social commerce to allow browsing users to easily add recommended items to their carts. It also has an app that enables shoppers to find products among Shopify merchants, a bit like using Amazon. And even more similarly, it plans to launch a two-day shipping service.

So there are many, many growth opportunities available for the company. And while Shopify might seem overpriced at this moment, strong future indicators combined with a recent pullback could make the stock worth buying in the near term.