The past few years have been anything but normal, with the pandemic, inflationary pressures, higher interest rates, and ongoing economic uncertainty at the top of investors' minds. This has made the business environment a unique one for executives to handle.

Even tech- and internet-focused enterprises haven't been immune to the volatility. Take Shopify (SHOP -3.15%). Its shares have been on a roller-coaster. The good news, though, is that this e-commerce stock has more than tripled since April 2019, crushing the broader Nasdaq Composite.

So should you buy Shopify right now?

Reasons to be bullish

It's easy to be optimistic about this business. Thanks to the long list of products and services Shopify offers, like the ability for merchants to quickly set up an online presence and handle marketing, inventory, and payments, the company likely benefits from switching costs. This means it has lock-in from its customer base, who are discouraged from changing service providers.

You could argue that this makes up Shopify's economic moat. This should continue helping it fend off rivals in the space, boosting the chances the business is still relevant and doing well far into the future.

Operating in the expanding e-commerce sector has certainly resulted in tremendous growth. Shopify reported gross merchandise volume (GMV) and revenue of $235.9 billion and $7.1 billion in 2023. These two key figures were astronomically higher than they were just five years ago. Gains like this wouldn't be possible if Shopify wasn't solving a critical problem for its customer base.

Wall Street remains optimistic. A consensus of analyst estimates calls for revenue to rise at an annualized clip of 21% in the next three years. From management's perspective, the growth playbook hasn't changed. It's all about introducing new products and services, attracting more merchants, and continuing to better monetize the platform. It also helps that online shopping and digital payments are two powerful secular trends working in Shopify's favor.

Reasons to be bearish

Shopify has been focused on cutting costs, laying off a sizable chunk of its workforce, and selling its logistics unit to free up capital that can be invested in the core operations. This helped the business produce positive operating income in the back half of 2023, which might be a one-time development.

Historically, Shopify hasn't generated consistent profitability. Investors might let this slide, given the company's growth potential, but I think it's important to prioritize owning businesses that are in a sound financial position, especially when interest rates are higher. Having access to cheap debt to fuel growth is no longer the case.

Shopify might also be overly exposed to macroeconomic forces. Yes, it's a tech enterprise. However, its customer base consists of small businesses that could be hit hard during recessionary times when consumer spending is weaker. In fact, many might actually fail. And this would have a major negative impact on Shopify's financials, as its GMV gains could slow.

Despite trading 59% below their peak price, shares are also extremely expensive right now, in my opinion. Investors can buy the stock at a price-to-sales ratio of 12.8. That's a huge discount when compared to Shopify's historical average of 22.5, but still quite high.

I believe Shopify shares price in a ton of optimism about its future, and there is downside risk should the business miss quarterly earnings estimates at some point. Investors need to realize that there is a minimal margin of safety at current levels. While I appreciate this business and what it's doing for its customers, I can't recommend buying the stock today.