Shopify (NYSE:SHOP) benefits from the continued transition by business to an online presence. The trend is accelerating, and the cloud-based, e-commerce platform is on a hyper-growth trajectory that not even the pandemic could disrupt.

While the rate of growth may have eased up after last year's meteoric spurt as locked-down individuals launched their own start-ups at a record pace, expansion is reverting to a more normalized and sustainable pace for the long term.

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Founded in 2004, Shopify went public 11 years later. Since then, the stock price has experienced some volatility at times. But in the six years it has been a public company, investors are sitting on tidy gains from those early days when it began trading at just $17 a share.

At around $1,470 per share today, Shopify is a $182 billion company that's valued at 43 times this year's sales, or what Wall Street says makes it fully valued at this level.

But looking beyond the near-term noise, let's see if Shopify can still generate additional multibagger gains and if it has the potential to become a trillion-dollar stock over the next two decades.

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On a growth trajectory of its own making

Shopify doesn't provide specific guidance, but maintains its growth will continue more or less in a normalized fashion, albeit at a slower pace than was set during 2020.

It estimates livestream shopping events will generate $25 billion by 2023 in the U.S. as Amazon (NASDAQ:AMZN) and Meta (NASDAQ:FB) test live sales platforms, and click-and-collect commerce will top $64 billion this year alone. Globally, around $2 trillion is spent each year on the top 100 marketplaces. That's a lot of opportunity for Shopify to tap into, and analysts concur.

Revenue is forecast to rise at a compounded rate of over 38% annually for the next five years, growing from $2.9 billion to almost $14.6 billion by the middle of the decade. Analysts could be underselling it a bit as revenue grew 46% in the third quarter to $1.12 billion, and the fourth quarter is still expected to contribute the greatest amount to full-year revenue.

Shopify's e-commerce retail business was above the level it was at two years ago, and it continues to follow the hot trends. 

In Q3, Shopify introduced its new Shopify Markets to enhance cross-border commerce. It also added TikTok Shopping, which allows consumers to organically discover products along shopping tabs linked directly to a merchant's online store. Shopify has even launched a no-fee money-management platform called Shopify Balance.

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Shopify's path toward a trillion-dollar market cap

Considering the trajectory Wall Street is forecasting, if the e-commerce platform's current price-to-sales (P/S) ratio makes it fully valued, then in just five years time it will be well on its way toward a trillion-dollar market cap.

Hitting those targets would give it a market capitalization of $630 billion. If its rate of growth were halved afterwards, or 19% annual revenue increases, it would be generating sales of almost $200 billion annually by 2040.

Assuming the company is still valued at over 40 times sales, its market cap would easily surpass $1 trillion. But it's not realistic to think it can continue sporting such lofty valuations down the road, not when most of its rivals don't trade near 20 times revenue.

Oracle (NYSE:ORCL), for example, trades at just six times sales, and Salesforce.com (NYSE:CRM) goes for around 10 times sales. The best its peers can do would be BigCommerce (NASDAQ:BIGC), which is valued at 15 times sales.

Even so, if Shopify were trading at a P/S multiple of just 5, it could conceivably still exceed a trillion-dollar market cap.

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Looking beyond the numbers

Instead of trying to dial in some parabolic number, investors would do better to see if what Shopify is building is sustainable. From that standpoint, it looks likely.

FTI Consulting estimates that online retail market share as a percentage of total retail sales in the U.S. will grow from 18% in 2020 to 33% by 2030. It will surpass the $1 trillion mark by 2023 and approach $2 trillion by 2030.

The small- to medium-sized business market alone is a $153 billion opportunity for Shopify, and it's only begun scratching the surface of a subscription-based model that will give it greater levels of recurring revenue at higher margins. Its monthly recurring revenue, growing at a compound annual rate of 43% over the past five years, reached $98.8 million last quarter.

With that in mind, Shopify looks like a viable stock to buy and hold for years to come even if it doesn't bust through the trillion-dollar threshold. But I think it's on a path to do just that, and the e-commerce platform will be an impressive multibagger for investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.