Shares of Shopify (SHOP 1.11%), the e-commerce platform, have been on a tear today as investors poured back into the stock following a decline yesterday. The company's share price has gained an impressive 13% today, but are investors right to be snatching up shares of this high-growth tech stock?
Absolutely.
Image source: Getty Images.
While today's share price jump is likely a rebounding effect after the company's share price tumbled yesterday, investors who've been paying attention to Shopify know that this company is still experiencing impressive growth.
Consider these highlights from the company's fourth-quarter results, reported on Feb. 16:
- Shopify's total sales spiked 41% to $1.3 billion.
- Sales from the company's merchant solutions sales -- its largest revenue segment -- surged 47% year over year.
- Gross merchandise volume (GMV) on the platform spiked 31% to $54 billion.
- Non-GAAP (adjusted) earnings per share of $1.36 beat analysts' consensus estimate of $1.30.
Indeed, Shopify beat Wall Street's consensus estimates not just for earnings, but also for revenue and GMV in the quarter.
Despite these solid results, Shopify's share price fell after the quarterly results were released.
Some investors were concerned about the company being able to keep up its pace of growth, while other investors have been exiting high-growth stocks as the broader market -- particularly tech stocks -- has suffered over the past several months.
But here's the main point: Shopify is still putting up very good financial results and is continuing to successfully tap into the e-commerce market.
The company has nearly tripled its revenue over the past two years, has twice the number of merchants using its platform than it did in 2019, and it's more than doubled its GMV over the past two years.
If that doesn't spark investor optimism, I don't know what does.
And for investors who can look past some of the short-term volatility that the broader market has experienced over the past few months, it's likely that now could be a great time to pick up some shares of this impressive e-commerce play.
