5 Reasons to Buy Shopify Stock in 2021
Shopify (NYSE: SHOP), the largest e-commerce platform, has proven to be an incredible resource for entrepreneurs of all shapes and sizes during the 2020 pandemic.
Here’s why I’m still bullish on SHOP going into 2021.
Highlights
- Direct to consumer service (higher margin for the seller, the buyer doesn’t have to go through typical retail woes)
- Easy owner experience (for those who have never even heard of HTML and definitely for an experienced developer)
- No high-cost developer or designer fees (or agency communication headaches)
- Used exclusively by successful investors and entrepreneurs
- Their growth in the pandemic in 2020
#1 Direct to Consumer Services
Shopify sellers take a higher margin and the buyer doesn’t have to go through typical retail woes i.e. driving to a physical store, waiting in line, etc. It’s more convenient to shop online and cut out the middle man, hence the term direct to consumer.
#2 Easy Website Owner Experience
My Current Shopify Stock Gains
Since I bought this stock on March 16th, 2020 during the pandemic crash, Shopify stock has gone up +262.83.
January 2021 SHOP Stock Progress
Stock ticker: SHOP
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#3 No high-cost developer or designer fees (or agency communication headaches)
Whether trying to find a reliable independent developer or a dev agency, chances their rates will be a lot higher than what you’d pay for using Shopify as a service.
Additionally, with Shopify, you’d have full autonomy to make content and design edits. No need to write up a change request to submit to a developer and then having to go through the waiting and approval period.
#4 Shopify Is Used Exclusively By Successful Investors and Entrepreneurs
Chipotle and Mr. Wonderful from hit tv show Shark Tank and social media entrepreneurs like Mark Bell and Julian Smith exclusively use Shopify.
On June 13th, 2020, Chipotle announced a virtual farmers market powered exclusively by Shopify. This was in efforts to empower their farmers/suppliers to improve their e-commerce sites. This upgrade would not only make the supplier’s online presence more attractive but user-friendly as well; making it easier to sell and order.
#5 Their Growth In The Pandemic in 2020
Here’s a chart summarizing Shopify’s growth from February 2020 to December 2020.
Shopify Stock Performance 2020
Looking at the data, the 2020 financial reports for Q1, Q2, and Q3 (still waiting on Q4 report to release) have all shown incredible profit margins.
In quarter one, gross profits grew 43% ($257 million) in the first quarter of 2020 compared to last year’s figures. Solid growth gains surged in the second quarter, up 83% comparatively to last year’s second quarter. The latest press release, the third quarter, shows their biggest gains at a whopping 87%.
Gross profit dollars grew 87% to $405.1 million in the third quarter of 2020, compared with $216.7 million for the third quarter of 2019.
Q3 Financial Results for SHOP
I will report back here when the fourth-quarter financial results are in.
Sources
Q1 SHOP Press Release
Q2 SHOP Press Release
Q3 SHOP Press Release