Shopify
Be ready to stomach risks! The company is trading with a 290 PeFwd, which either means that the share price has gone out of control or, alternatively, the company’s growth outlook is largely above average, which could truly be the case in the e-commerce sector.
The company offers merchants a suite of services to help them run their businesses more efficiently. The software provided includes payment processing, fulfillment, shipping, and procurement solutions.
While the traditional retail market growth is flat, the e-commerce market is expected to increase by 14.7% per annum until at least 2027. Shopify estimates that its addressable market is in excess of $150 billion. The company’s merchant growth is attractive—at the end of 2020 the company hosted 1.7 million merchants while the same item was at 820’000 at end 2018. More importantly, this number is not expected to decline as their customer retention ratio is amongst the highest.
Given these figures and the company’s competitive advantage, the present share price looks attractive, especially if one can scoop with the expected above average volatility such an opportunity brings along.