Shopify (SHOP 0.60%) is a household-name e-commerce stock that has delivered incredible returns for investors in recent years. With shares up more than 3,200% over the past five years alone, some investors might be wondering how much further the stock can go before it exhausts its upside potential.
In this segment of Backstage Pass, recorded on Sept. 20, 2021, Fool contributor Toby Bordelon shares why this high-growth stock still has plenty of juice left for long-term investors.
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Toby Bordelon: OK, so Shopify. You know, I don't know if we need to spend a lot of time on the intro to Shopify here. Shopify is a great company. I own shares myself. One of the few of these high-price companies, Brian, that I own some shares of and I'm very pleased that I do. Just those few shares have over the last couple of years become a large enough position to make this worth following quite closely. As I'm sure many investors who've been invested for a few years know.
If you are a Fool member and if you're watching, you are, all of you watching you're Backstage members mostly, you probably subscribed to the service that recommended Shopify. That's how broad-based, I think it's something like 20 services when I checked. Odds are very, very good that everyone listening here subscribes to at least one service recommending Shopify.
What do they do, right? So let's just be short here since I think most of us know this company. They operate a platform that provides a set of tools that makes it easy for individuals and small businesses to open up e-commerce stores online.
That's essentially, if you sum it up into a nutshell. They have tools that can help you set up a website. They help to set up a website, process payments, and both online and in-person payments. If you've got a bricks-and-mortar store and you've got a website component to that, you can actually use Shopify as payment processing systems for both aspects of your business.
They help you handle fulfillment and shipping. You can use their tools to analyze your sales and see the trends, what's going on there. You can market your business with their tools. They can help you expand internationally if you want to do that. A lot more going on, too. I really consider Shopify to be an infrastructure company, not so much an e-commerce company, because I think they are part of the infrastructure of e-commerce.
I think if you are a small business or you are an individual doing commerce online, you are going to be using Shopify or a company that competes directly with them in some form because you just going to need that expertise and that help to compete in the modern world.
You're not going want to do this all on your own from scratch. Nobody does that anymore, right? You're going to use these tools that can be a lot more efficient. You know, the one issue I might have with this company is price, as I'm sure Brian expected, in valuation. [laughs] It just seem to be expensive, by some metrics but it's a great business. If you own shares, I think you keep owning them.
If you don't own shares, I think you maybe give it a serious look. Lots of room to grow in this business and you can't deny what they've done in the past couple of years. Fine business.