The Canadian e-commerce giant ( ) has revolutionized the way businesses of different sizes sell products online. Even though e-commerce has lost some of its lustre to newer hype cycles, such as generative AI (artificial intelligence), it is still considered a transformational megatrend in the market. So, with the constant evolution of this industry, the question every investor might have is: will Shopify survive and thrive over the next five years? Let’s dive into this question, and see what may drive this higher, and what risks could be on the horizon.
What does Shopify do? As mentioned, Shopify is among the leading e-commerce platform providers for small and medium-sized businesses setting up online shops. The company generates most of its revenue and cash flows primarily from transaction fees charged to businesses using its platform. Additionally, it earns from software-as-a-service through various other services.
The company’s resilient and stable cash flows provide Canadian growth investors with a clear forecast of future profitability based on market share expansion metrics. Despite facing a decline post-pandemic, Shopify has maintained steady growth. Its innovative technology enables merchants to manage, design, market, and sell their products and services, proving durability through various market cycles.
Recovery mode Similar to many online-centric companies, Shopify experienced a surge in business and its stock price during the COVID-19 pandemic, reaching an all.
