31% income growth! This upper growth stock continues to feed

shop (NYSE: shop) reported his profits from the fourth quarter yesterday (February 11). As is the case, the numbers of the electronic commerce facilitator were very impressive, which caused the growth stock by 3.1%.

This brings the five -year return from Shopify to 133%!

The steering wheel continues

Shopify was founded to foster entrepreneurship helping merchants build an online store and succeed. As the company does this, it also grows, fed by the success it allows (the effect of the steering wheel).

Shopify now has a more than 12% stake in the US electronic commerce market. UU. amazon! And continues to expand rapidly in Europe and Japan, with international growth of more than 30% per second consecutive year in 2024.

In the fourth quarter, income accelerated 31% year after year to $ 2.81 billion, marking the seventh consecutive quarter of 25% growth (excluding the logistics business it sold in 2023). That exceeded Wall Street expectations for $ 2.73 billion.

The income of the whole year increased by 26% to $ 8.9 billion, with more than 875 m unique buyers who bought some shopify merchants (an incredible one in every six Internet users). Meanwhile, the free cash flow margin (FCF) expanded each quarter, ending the year to 18%, compared to 13% in 2023.

A positive final thing to take into account here was the volume of gross merchandise (GMV), which increased 24% last year by just under $ 300 billion. That was 2.4 times higher than online purchase boom fed by 2020 pandemic.

As a reminder, GMV represents the total value of all processed transactions through the company's platform. And since it was founded in 2006, now the $ 1trn Mark in cumulative GMV!

All this tells us that the Shopify growth engine is still snoring, unlike many other electronic commerce companies whose growth has slowed down after Covid (Etc.For example, or eBay).

Harley Finkelstein, president of Shopify, commented: “With our verified history, the agility of our platform and our relentless approach to the success of merchants, we like our probabilities in this evolving technological panorama, and we are excited about the opportunities it provides for Shopify and our merchants. “

<h2 class="wp-block-heading" id="h-investing-in-ai“>Invest in the

The company has been strongly investing in artificial intelligence products (ai). He has created Shopify Magic, which is a set of generative characteristics of ai that helps merchants create products descriptions and transform product image funds.

In addition, he has launched Sidekick, an ai assistant who provides personalized advice and step -by -step guidance to help merchants optimize their businesses.

As a shareholder, I am totally supporting this implacable technological innovation. The characteristics of ai are attracting more merchants, solidifying Shopify's position such as the reference platform to run an online store.

However, it seems that these investments will weigh on the margins in the short term. The orientation for the current Q1 is for strong income growth (around 25%), but for the FCF margin to fall into the mid -adolescents.

Leisurely

It is difficult not to be a long -term bullish, but this pink perspective is reflected in the valuation of the action.

Based on 2025 forecasts, around 14.6 times sales are quoted. This means that the company must continue to grow above 20% for some time to justify this premium assessment. If growth slows down, the stock could withdraw sharply.

Given the high assessment, investors may consider considering a position in the falls over time. There is no hurry to go to all. After all, as Shopify says: “We are building a 100 -year -old company. “