Shopify is a Canadian e-commerce company headquartered in Ottawa, Ontario. It is also the name of its proprietary e-commerce platform for online stores and retail point-of-sale systems.
Shopify offers online retailers a suite of services “including payments, marketing, shipping and customer engagement tools to simplify the process of running an online store for small merchants.”
Shopify was founded in 2004 by Tobias Lütke, Daniel Weinand, and Scott Lake, who were all working on an online snowboarding store called Snowdevil.
Shopify was launched in 2006 after Lütke realized that the Snowdevil platform could be used by other businesses beyond snowboarding. Shopify provides services to help businesses grow and manage their operations. These services include payments, shipping, marketing, customer engagement, and more.
Shopify has been growing rapidly since its inception. In 2015, it was reported that Shopify’s revenue had grown by 74% to $205 million.
In 2016, Shopify’s revenue grew by 95% to $390 million. And in 2017, Shopify’s revenue grew by 60% to $600 million.
Shopify is now a publicly traded company on the New York Stock Exchange with a market capitalization of $9 billion as of 2018.
Is Shopify overvalued?
While Shopify’s market capitalization has grown rapidly in recent years, it is still relatively small compared to other publicly traded companies. For example, Amazon has a market capitalization of over $800 billion as of 2018. So while Shopify may be considered overvalued by some investors, it still has a lot of room to grow.
Shopify (SHOP) has been one of the best-performing stocks in recent years, but some analysts believe the company is now overvalued.
While Shopify does have a strong business model and is growing rapidly, its valuation is getting ahead of itself. For example, Shopify trades at around 14 times sales, which is very high for a company that is not yet profitable.
Investors should be aware that there is a risk that Shopify’s stock could correct sharply if the company misses expectations or if the overall market sells off.
