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Shopify (TSX:SHOP) stands out as one of the largest e-commerce platform providers globally and one of TSX growth stocks. Following its decline in 2022, the company has experienced significant market growth, with Shopify stock roughly tripling from its lows.
Looking ahead, one hidden catalyst that investors should focus on is Shopify's international expansion. While the company has achieved impressive penetration in its core North American market, with a 15% penetration rate, there remains substantial potential for growth in global markets. TSX:Shop's e-commerce platform generates steady cash flows through transaction fees, and its expanding software-as-a-service business model adds stability for long-term growth.
Although Shopify's global growth strategy is well-known, its pursuit of partnerships and growth strategies in BRICS nations suggests the potential for accelerated top- and bottom-line growth. Last year, Shopify reported revenue of $7.1 billion, a 26% year-over-year increase, driven by continued e-commerce growth and strong performance in subscription services.
With gross profit reaching $3.5 billion and margins of around 50%, Shopify's expansion into new markets becomes increasingly lucrative. This has contributed to the stock's significant rally over the past year, doubling from peak to trough.
Looking ahead, Shopify's strong traction in the U.S. market provides stability, while its growth outlook in other high-growth nations offers further potential. Despite trading at less than 70 times earnings, Shopify appears reasonably valued, and future earnings beats could propel the stock even higher. Overall, Shopify stock seems poised for continued growth and could offer investors significant upside potential in the future.
