Shopify, a provider of e-commerce software and solutions, is Canada’s tech superstar.  The macro backdrop is positive, with ecommerce sales in the US growing at ~15%.  Add to that Shopify’s new products (merchant services) and market share gains, and you get a company that has increased revenue at a compound annual growth rate of 65% over the last 4 years.

Shopify generates strong gross margins of 55%, however, given the significant spend on Sales and Marketing as well as R&D, the company is not yet profitable.  No dividend here!

At the current share price of US$660, it has a market cap of $78B and trades at a valuation of 48x EV/Sales (2019).  Valuation for the stock is discussed using a 5 year forecast and assumptions for three separate cases (Bull, Base and Bear).

This video provides an overview of $SHOP as well as key considerations for investors.