One of the hardest-hit tech stocks this year has been e-commerce company Shopify (SHOP 0.08%). Down an incredible 70%, the company's drop has made the Nasdaq Composite's 28% decline this year look tame. A troubling outlook for the economy and a slowing growth rate are the key reasons investors have been bearish on the tech stock in 2022.

But with the stock back to trading at 2019 levels, has Shopify bottomed out? Is next year likely to be a stronger one for the business, and would buying the stock today be a good move?

Why things could get better

A big problem for Shopify investors is the growth rate. The company's sales for the period ended Sept. 30 totaled $1.4 billion and rose at a relatively modest rate of 22% year over year. A year ago, its growth rate was an impressive 46%.

However, the company has been expanding its offerings and services to potentially unlock more growth down the road. Shopify recently launched Shopify Markets Pro, which will make it possible for merchants to easily expand to 150 countries "without adding complexity."

Previously, Shopify Markets allowed merchants to reach 14 countries, on average. The company's Translate and Adapt feature will ensure that a customer has a localized experience and the merchant won't have to worry about translating content.

Through these initiatives, Shopify's merchants can do more business on the platform and reach more customers, which can be great news for the business next year.

Plus, the stock's low valuation definitely works to Shopify's advantage now. A big reason investors have been wary of stocks this year is that their prices were simply egregious. At the height of the craziness of the past two years, shares of Shopify were trading at more than 60 times revenue.

Today, the stock's valuation looks a lot more reasonable. While I would be careful to say that it has hit a bottom, it would be surprising to see another significant sell-off next year, considering all the pessimism priced into the tech stock currently.

SHOP PS Ratio Chart

SHOP PS Ratio data by YCharts.

Why things could get worse

For all the tools Shopify may offer its merchants, it may all be moot if global economies continue to struggle. Inflation is making it inevitable for consumers to cut back on spending and be more selective in their shopping. And there are signs that Shopify's growth rate could continue to decelerate in future quarters.

While Shopify boasted of hitting record Black Friday and Cyber Monday sales last month, the growth rate itself wasn't that impressive. On Black Friday, sales of $3.36 billion rose by just 17% from the same period last year. Cyber Monday sales of $7.5 billion increased at a higher rate of 19%, but that, too, was lower than the 22% growth the company achieved in its most recent earnings report.

The overarching trend remains the same; sales are slowing down, even during the top retail days of the year. The danger for Shopify and other retailers is that things may get worse before they get better. The longer inflation drags on and remains a problem, the longer a slowing growth rate may last for Shopify.

Is Shopify a buy heading into 2023?

Overall, there are more reasons to be bullish on Shopify for next year than there are to be bearish. The sell-off this year looks extreme. And with the company focusing more on bringing down its costs and introducing initiatives to help merchants grow internationally, the net result could be a positive one for the business next year if its bottom line improves or sales prove not to be as bad as expected.

While there may be a recession in 2023, it may not be a long one. And if there's any hint of a recovery in the global economy, Shopify could quickly become a hot buy again.