The past year has been horrendous for most businesses across multiple industries. However, the COVID year has been a momentous one for the TSX tech superstar. In May 2020, Shopify (TSX: SHOP) (NYSE: SHOP) has passed Royal Bank of Canada as the largest publicly traded company in Canada.
The online trading platform capped 2020 with another milestone. It ranked number one in the second edition of the TSX Top 30 list. The TSX launched the flagship program which rewards the 30 best performing stocks in 2019. Shopify placed second behind Canopy growth in the first edition.
The Toronto Stock Exchange will announce the new winners of the third issue of the recognition program in September 2021. Will the tech title repeat itself as a growth title for the second year in a row?
Outperforming technological action
As of July 9, 2021, Shopify is the largest Canadian company listed on the Toronto Stock Exchange by market capitalization ($ 232.31 billion). RBC is second ($ 180.09 billion), followed by Toronto-Dominion Bank ($ 154.04 billion). The tech action outperforms the two bank stocks with a gain of 35.7% year-to-date. It also outperforms the TSX’s + 16.2% gain so far in 2021.
Shopify’s total return over the past 6.14 years is 5,861.50 (94.61% CAGR). If you had invested $ 10,000 in May 2015 when the price was only $ 17 per share, you would be a millionaire today. The current share price of $ 1,862.97 is 10,868.65% higher than on the first trading day.
Facilitate entrepreneurship
Shopify is capitalizing on the growth of digital commerce. Its merchant-driven business model is the reason entrepreneurs around the world are growing their businesses. Amy Shapero, Chief Financial Officer of Shopify, said, “We are focused on creating a business operating system that will help shape the future of retail. “
The company expects the favorable winds for digital commerce in 2021 to remain strong. Thus, he could still seize massive opportunities that would propel the e-commerce platform even further. For Shopify President Harley Finkelstein, the singular goal is to facilitate entrepreneurship so that it is easier for entrepreneurs to succeed.
Commercial performance and highlights
In the first quarter of 2021 (quarter ended March 31, 2021), Shopify’s momentum does not stop. More and more traders are choosing the platform to launch their businesses and sell their products. Total revenue increased 110% to $ 988.6 million from the first quarter of 2020. Merchant Solutions revenue accelerated 137% due to significant growth in gross merchandise volume ( GMV).
Notably, Shopify reported net income of US $ 1.25 billion compared to the net loss of US $ 31.4 million during the same period in 2020. The Canadian tech giant had 7.87 million. billion dollars in cash, cash equivalents and marketable securities at the end of the quarter.
Shopify has two growth engines in 2021. It continues to lay the foundation for the Shopify Fulfillment Network. The goal is to optimize its software and network and introduce features that will allow traders to have better inventory control and more flexibility to manage orders.
The development of Shop, the all-in-one mobile shopping assistant, is underway. As of March 31, 2021, over 107 million registered users, including shoppers, are using Shop Pay and Shop App. The number of monthly active users now exceeds 24 million. Shopify’s cash advances to local merchants and those in the US and UK hit a record $ 308.6 million in the first quarter of 2021.
Always # 1
I can’t think of a business that could topple Shopify from its high position. The e-commerce platform is still expected to rank first in the TSX’s Top 30 in 2021.
Foolish contributor Christophe Liew has no position in any of the stocks mentioned. The Motley Fool owns shares and recommends Shopify. The Motley Fool recommends the following options: $ 1,140 long calls in January 2023 on Shopify and $ 1,160 short calls in January 2023 on Shopify.
