Shopify recorded impressive cost when it published its quarterly earnings Wednesday, The Information reports.
Why It Matters: “It has been a killer year for Shopify, buoyed by legions of homebound consumers.” The pandemic’s effect on e-commerce platforms cannot be understated — online shopping grew at an astonishing pace in 2020 as demand skyrocketed.
Numbers To Consider:
- Shopify’s yearly revenue hit $2.93 billion in 2020, an 86% increase.
- Its Q4 revenue also blew past expectations, landing at $978 million. It was a 94% increase from the year-ago period.
- Growth merchandise volume, or the sales flowing through the Shopify platform, exploded to $41.1 billion, double what it was in Q4 2019.
Still, there are concerns about how Shopify will perform when the world eases away from the pandemic norms.
- Shares fell 3.3% to $1,425 on Wednesday as “investors worried over the company’s future in a post-pandemic world.”
- Shopify hasn’t released guidance on earnings for 2021 but did acknowledge that its growth will probably slow as consumers return to stores.
When the tide eventually goes out on this growth stock wave, I fully expect Shopify ($SHOP) stock to have been swimming a naked.
At $1,408 per share, $SHOP stock is trading at a $166 billion valuation. That’s 42.8x forward sales, 82.3x forward Gross Profit, and 336.2x forward EBITDA on analyst estimates (which, admittedly look low and probably assume post-pandemic slow down in growth).
Regardless, to put this in perspective, this little company with $3.0 billion in Revenue and $1.5 billion in Gross Profit is now valued higher than:
- Qualcomm ($QCOM)
- Starbucks ($SBUX)
- Square ($SQ)
- JD.com ($JD)
- CVS ($CVS)
- Airbnb ($ABNB)
- BP ($BP)
- Costco ($COST)
Shopify has been, and will continue to be, my primary example of Icarus flying closer and closer to the sun.