The investment thesis for Shopify (SHOP 0.08%) has changed dramatically over the past couple of years thanks to the shift to online shopping during the pandemic. However, that catalyst has passed, and Shopify investors are wondering where the next growth phase will come from.

Shopify's latest earnings results reveal the next source(s) of growth. But is it enough to warrant an investment? Let's take a look and see if Shopify makes the list of top growth stocks to buy now.

Add-ons add up

Shopify's software allows anyone to set up an online store and perform basic tasks like tracking inventory and processing credit card transactions. Although the basic tier of this offering has cost about $30 per month for nearly 12 years, Shopify recently raised prices by about 33% across the board, drawing some customers' ire.

However, one price hike in 12 years is nearly unheard of, and given how essential Shopify's software is to these e-commerce businesses, it's unlikely they would decide to switch to another vendor over it. Still, this is a one-time catalyst, and it won't help Shopify grow its revenue past April 24, 2024, one year after it takes effect.

So if the price hike isn't the new business driver, what is?

Shopify has created dozens of base product add-ons, including Markets Pro, which helps its clients sell globally, and Shopify Point of Sale (POS), which allows its clients to process in-store transactions. It also offers tax products, a fulfillment network, and advertising.

In Q4, revenue from the merchant solutions segment rose 30% year over year to $1.3 billion, indicating growth from the Shopify Pay and Shopify Shipping products. Subscription solutions -- the base offering plus other subscriptions like POS capabilities -- were up 14% to $400 million. Shopify's add-ons are becoming its primary sources of growth.

While that's not 2020 or 2021 growth levels, the shift highlights Shopify's growth reacceleration now that difficult comparisons have passed.

SHOP Revenue (Quarterly YoY Growth) Chart

SHOP Revenue (Quarterly YoY Growth) data by YCharts.

Still, all the growth in the world means nothing if you can't turn it into profits.

Expense growth comes with an asterisk

Shopify is still an unprofitable company, and the deficit has only gotten larger since last year, with operating expenses rising 46%. However, this isn't a fair comparison because Shopify's acquisition of Deliverr (a shipping logistics solution) increased headcount. In the company's Q4 earnings call, management pointed out that operating expenses were essentially flat compared to Q3 even though revenue grew over the last quarter.

One quarter doesn't make a trend, so investors must monitor Shopify's operating expenses to ensure they don't dramatically rise throughout 2023. Considering Shopify's Q4 operating margin loss of 11%, the business still has a ways to go before becoming consistently profitable.

So is the stock a buy? Let's take a look at its valuation.

SHOP PS Ratio Chart

SHOP PS Ratio data by YCharts.

At 10 times sales, Shopify's stock is by no means cheap. But with Wall Street analysts guiding for 19% sales growth in 2023 and 21% in 2024, the business clearly has room to run. So while the stock isn't a screaming bargain right now, it's probably not a terrible buy.

Shopify has a massive and loyal customer base, and it's far from finished rolling out its merchant solutions. Although the lack of profitability is concerning, management has learned its lesson from 2022's downturn and is making Shopify "nimble, lean, and highly adaptable," according to new CFO Jeff Hoffmeister.

If you're willing to hold Shopify's stock for three to five years, I think it could be an outstanding addition to a portfolio. But if you have a shorter-term mindset, better options are probably available.