Could Buying Shopify Stock Today Actually Set You Up for Life?

Shopify's stock keeps making waves—but is it really the golden ticket to lifelong wealth?

Let's cut through the hype.

The Bull Case: Dominance in E-Commerce

Shopify isn't just a platform; it's the backbone for millions of online stores. From startups to household names, businesses rely on its infrastructure. That kind of market penetration doesn’t happen overnight—and it doesn’t fade easily.

Growth Trajectory: More Than Just Hype

Revenue spikes, merchant adoption soaring—the numbers tell a story of expansion, not speculation. While traditional retail stumbles, Shopify’s ecosystem thrives. It’s not riding a trend; it’s building one.

The Risks: Because Nothing’s Guaranteed

Competition looms. Economic downturns threaten merchant success. And let’s be real—stock valuations can be as inflated as a crypto influencer’s promises. Diversify or regret it.

Long-Term Play or Short-Term Noise?

Shopify’s potential hinges on sustained innovation and market capture. Betting your future on a single stock? Even Wall Street pros wouldn’t risk their yachts on that. But for those with conviction—and a balanced portfolio—it might just pay off.

Image source: Getty Images.

Shopify is firing on all cylinders

Shopify makes money through the operation of its online storefronts for retail businesses of all sizes. About 25% of its revenue -- $656 million in its most recent quarter, ended June 30 -- is from direct subscription revenue. The remaining 75% -- $2 billion in its most recent quarter -- comes from merchant solutions, which include payment processing fees, currency conversion costs, and shipping.

As the number of merchants on Shopify's network increases -- and the amount of goods they sell also grows -- Shopify's revenue base naturally expands. This is one of the prime reasons why Shopify has delivered consistent revenue growth above 20% dating back to 2022. Indeed, over the last three years, Shopify has averaged quarterly revenue growth of 26%. In its most recent quarter, revenue growth accelerated to NEAR a three-year high of 31%, showing that the company's growth trajectory remains very potent.

What's more, Shopify's investment thesis isn't "growth at all costs." Increasingly, the company's margins and overall profits are taking center stage.

For example, after years of struggling with negative profit margins, Shopify has flipped the script. Operating margin now stands at nearly 14%. Accordingly, net income has soared. Shopify has generated $2.3 billion in net income over the past 12 months. The company credits increased scale, upsales of merchant solutions, and its new suite of AI-powered tools for delivering its surge in revenue and profits.

Is Shopify stock a buy now?

While Shopify's recent success is extremely impressive, the real question is whether it will continue. On that front, there are risks.

First of all, Shopify relies on small businesses, which make up the majority of its customer base. If a recession were to strike, small businesses are often most affected, meaning that Shopify's rapid growth could quickly evaporate. Moreover, trade and tariff policies remains in flux. Shopify's merchant base could suffer if costs for goods and shipping increase.

Finally, Shopify isn't a cheap stock. It trades at a price-to-sales (P/S) ratio of around 19. That's far above the average for most stocks (around 3.3), and it's even high relative to its own history. Over the past three years, Shopify stock has had an average P/S ratio around 13.

In short, Shopify stock isn't for everyone. However, for those investors seeking a dynamic, growth-oriented stock with exposure to e-commerce, Shopify is a name to consider.