Shopify Stock: E-commerce giant with German roots

Last Updated: 8. Januar 2024By

Today, I would like to introduce you to the Shopify stock. The Canadian software company offers online sellers an innovative, cloud-based sales platform for managing their product range. Interestingly, the company was founded by two Germans from Koblenz, Tobias Lütke and Daniel Weinand, who originally only wanted to build an online shop for snowboard equipment. As all shop solutions were expensive, complex and inflexible, the idea for Shopify was born.

A shop platform for all sales channels Customers can combine, control and organize their various sales channels – online shops, offline stores, apps or social networks – on one platform. This also includes customer relationships, order and payment processing, as well as AI-supported data analysis. So far, millions of online shops in over 175 countries are already using the e-commerce software solutions that Shopify offers its customers for rent online. The monthly fees for Shopify’s products depend on the processed sales.

Famous, big names among the customers Among the customers are not only small and medium-sized companies, but also well-known names such as Mattel, Heinz, Nestle, Hasbro, Red Bull, FTD, or Netflix. Most recently, Shopify reported record sales for its merchants on Black Friday, with a 9.3 billion USD turnover in last year’s promotional period, an increase of +24% compared to the previous year.

Turnaround expected In the last three years, revenues have increased by an average of +35%, while in the last year of 2022, the company posted losses. In the third quarter of 2023, a revenue growth of +25% to 1.71 billion USD was recorded. Earnings per share were at 0.24 USD (previous year -0.02 USD). Analyst estimates of 1.67 billion USD in revenue and 0.14 USD in earnings per share were clearly exceeded. For the year 2023, analysts expect an increase in sales of +25% to 6.99 billion USD, as well as earnings of 0.69 USD per share. For 2024, sales of 8.33 billion USD (+19%) and earnings per share of approximately 1.04 USD (+51%) are expected.

Stock in a new uptrend since the end of 2022

Yearly chart of Shopify stock, source: Stock Screener

Unbeatable market leader in online shop software Shopify offers a great and innovative product for online shops of all sizes that is cheaper, more straightforward, and more flexible compared to other shop solutions. The company’s products are miles ahead of the competition and are continuously being optimized and adapted to meet customer needs. Shopify has become a success story in its own right. The now extremely high seven-digit customer base of online retailers is no longer achievable for competitors. And there are still growth opportunities. So it might be worth taking a look at this stock.