Shopify Inc (TSX:SHOP)(NYSE:SHOP) is a business that continues to do well amid the coronavirus pandemic. On Oct. 29, the popular e-commerce company reported its third-quarter results for the period ending Sept. 30. It sales $767.4 million U.S. grew 96% from the prior-year period’s revenue of $390.6 million U.S. In the previous quarter, the Ottawa-based business was also coming off a strong performance where revenue of $714.3 million U.S. rose 97% year over year.
Prior to the pandemic, Shopify’s growth rate was showing signs of slowing down. In 2019, its sales for the full year were $1.6 billion U.S., and that was up just 47% from the previous year. Even 2018’s sales growth rate of 59% was higher.
Shopify’s proving to be a top stock to own during the pandemic and year to date its shares are up around 140%. The stock flirted with $1,500 earlier this year and did reach a high of $1,502, but it’s struggled to stay at that level. But now, with another strong quarter in the books, it may help turn its trajectory around, possibly back towards those highs. The stock didn’t get a boost on its earnings performance as widespread bearishness in the markets of late has sent many sectors into a tailspin.
The tech company’s an attractive investment to hang on to, particularly if you’re expecting more shutdowns due to COVID-19 and for people to spend more time (and money) at home and shopping online. The only drawback against buying shares of Shopify is that it isn’t cheap, trading at around 50 times its sales. But if it can keep growing its top line at a high rate, those multiples will come down in a hurry, which is why it wouldn’t be unreasonable to see the stock rise to new highs in the months ahead.