Key Points
- Rather than looking to get rich quick, adopt a long-term mindset when building your portfolio.
- Shopify provides a range of software and services that help merchants manage an omnichannel business.
- Block makes digital financial services more accessible for merchants and consumers.
Motley Fool Issues Rare “All In” Buy Alert
Beyond that, I would offer another piece of advice: Invest in companies that you think will leave a lasting impact on the world. The market can be volatile over short periods of time, but a long-term mindset helps blunt the impact of that volatility. For example, companies like Shopify (NYSE:SHOP) and Block (NYSE:SQ) have already reshaped the world, but both stocks still look like worthwhile investments.
Shopify is the retail operating system for more than 1.7 million businesses worldwide. Its software-as-a-service platform helps merchants manage sales across physical and digital storefronts, including custom websites, online marketplaces, and social media platforms. In fact, Shopify has introduced new integrations or expanded its relationship with several brands in the past year, including Alphabet‘s Google, Meta Platform‘s Facebook, and TikTok.
Likewise, Shopify also provides a range of additional services, including payment processing, discounted shipping, and marketing tools, each of which makes its value proposition more compelling for merchants. In short, Shopify offers a comprehensive solution for modern, omnichannel commerce. And the breadth of its portfolio has made it the most popular e-commerce software in the world, as it currently powers 27% of e-commerce websites on the internet.
Not surprisingly, Shopify has posted impressive financial results over the past three years.
| Metric | Q3 2018 | Q3 2021 | CAGR |
|---|---|---|---|
| Revenue (TTM) |
$952.2 million |
$4.2 billion |
64% |
| Free cash flow (TTM) |
($25.8 million) |
$458.2 million |
N/A |
SOURCE: SHOPIFY SEC FILINGS, YCHARTS . TTM = TRAILING-12-MONTHS. CAGR = COMPOUND ANNUAL GROWTH RATE.
Of particular note, more merchants are adopting services like Shopify Payments, Shopify Shipping, and Shopify Capital, a trend that translates into higher switching costs. Put another way, businesses are becoming increasingly dependent on Shopify, and with each new product it becomes more difficult for a merchant to cut ties with the company.
