I found about Shopify (SHOP) some years ago through Motley Fool.
I liked the investment thesis about exploding ecommerce and the fact that Shopify made things much easier to sell online.
Never underestimate the value of streamlining and making things easier.
That is why we use Excel not hand calculator.
Anyway, I liked the idea but thought it was too expensive in terms of valuation.
I know that I learned the lesson to pay for extreme growth. Yet I was still wary.
Remember Buffett told us to never lose money like twice.
I was very close to buying the stock but waited for some pullback that really never happened.
Yup, I missed it. And I missed it really big.
Anyway, SHOP currently has 5.9% market share of US ecommerce and its revenues has increased 7 times last five years! Wow!
Plus, their business model is likely to improve as users increase.
However, I am still a bit wary. First, SHOP mostly doesn’t talk about GAAP numbers and profits.
Well, that is because it is still losing money-
Given that the losses have decreased over time, it is likely they will start earning profits. It will likely follow Amazon’s trajectory.
However, given the competition, they may not be able to book to profit because they have to spend it on R&D and marketing to beat the competition so it may take longer to become profitable.
So should you invest in SHOP? I think it has good potential.
eCommerce will keep growing and SHOP has momentum with growing users of a sticky product.
I would not mind buying SHOP.
However, for me, I believe gold miners have more upside so I would stick to those for now. At the mean time, I will look for the next SHOP.
Lesson: Don’t mind for overpaying EXTREME GROWTH
Thank You Jesus for all Your love and wisdom. Let us be wise and share Your love and riches with others- Amen!
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