Shopify’s Rapid Growth Signals a Warning
As more and more consumers turn to online shopping, e-commerce platform Shopify (NYSE: SHOP) continues to boost its revenues. But despite the stay-at-home restrictions and changing consumer habits that have molded our digital economy at unprecedented speeds, Shopify announced yet another quarter of losses. Long-term investors should take heed.
At first glance, the company enjoys steady growth: It grew revenues by 71.94% over the past five fiscal years, and 46.5% year over year the past year alone (TTM). Total revenue in the first quarter was $470 million, with subscription revenue growing 34% year over year. Expectations are heavily in the company's favor, as pandemic restrictions have propelled more and more shops online. Indeed, Shopify reported that new stores created on its platform grew by 62% between March 13 and April 24. Investor confidence is soaring, and as a result, Shopify's stock price has risen more than 30% in the past month.
Image Source: Getty Images
Source Fool.com
