Shares of Shopify (NYSE:SHOP) surged to fresh all time highs after the ecommerce solutions provider delivered first quarter numbers that blew past expectations, while hiking its full-year revenue and profit guides, and issuing second quarter guidance that was likewise above expectations. In other words, Shopify reported a clean beat-and-raise quarter, and Shopify stock popped in response.

This post-earnings pop continues what has been a huge rally in Shopify stock over the past several months and years. Year-to-date, the stock is up 75%. Since Christmas Eve 2018, it’s more than doubled. And, over the past three years, SHOP stock is up nearly 700%.

At this point in time, it certainly looks like Shopify stock is unstoppable.

But, unstoppable isn’t a thing in the stock market. The law of financial gravity states that stocks can’t go up in straight lines forever. Eventually, no matter how good the long term growth narrative, no matter how strong the drivers, and no matter how big the numbers, every stock runs into volatility.

Shopify stock is overdue for some volatility here. That’s why this looks like a good time to do some profit taking. Note, I say some profit taking. SHOP stock is a long term winner. You never want to sell out completely. Always keep a core position in this name so long as the growth narrative remains healthy. But, in order to maximize return, sell some on huge rallies, and buy back some on big dips.

Right now, we are in the middle of a huge rally. Keep the core holding. Sell some here. Buy back on a big dip.

Q1 Numbers Underscore Long Term Strength

Shopify’s first quarter earnings report was really good and broadly confirmed that SHOP stock is a long term winner that will grow by leaps and bounds over the next several years.

Long story short, we are pivoting into a world of direct decentralized retail. In a nutshell, the widespread proliferation of the internet has spawned an era of unprecedented connectivity, and a byproduct of this connectivity is that anyone can sell anything to anyone, through any channel, at any time.

This pivot in the global retail model is happening with accelerating pace and at increasingly large scale. Essentially, direct decentralized retail is taking over. Shopify is the face of this pivot, since it provides the ecommerce solutions that enable and empower sellers of all shapes and sizes to be successful in this new retail world.

First quarter numbers speak to the strength of this trend, and the dominance of Shopify. Revenues rose 50% in the quarter, on top of 68% growth in the year ago quarter and ahead of the 45% growth expected from analysts. GMV yet again rose north 50%. Subscription revenue yet again rose north of 40%. Merchant revenue yet again rose north of 50%.

Across the board, Shopify’s top-line metrics refuse to slow down. They keep running along at 40%-plus and 50%-plus rates, a sign that the direct decentralized retail trend is only gaining momentum. This big growth should persist. Last year, Shopify’s GMV accounted for only 1.5% of global digital retail sales.

Over time, as the direct decentralized retail trend spreads, that number could easily expand to 5-10%. In an ecommerce market that’s already growing at a 15%-plus rate, that robust share expansion could easily continue to drive 30%-plus revenue growth for Shopify for a lot longer.

Meanwhile, gross margins are high around 60%, and opex rates are consistently falling so that the company is now regularly profitable. As the opex rate continues to drop with scale, continued robust margin expansion and profit growth is likely.

Overall, Shopify stock is a long term winner. You have robust revenue growth, on top of big margin expansion, in a company with small but rapidly scaling share in a secular growth market. Ultimately, that winning dynamic will power SHOP stock higher in the long run.

Near Term Turbulence Is Coming

Although SHOP stock is a long term winner, the stock also looks due for some turbulence here.

Go look at the chart for SHOP stock. SHOP stock is up big over the past few years, but due to its big valuation and momentum nature, the stock also frequently undergoes big sell-offs. In 2018, SHOP stock had four 20%-plus sell-offs. In 2017, it had just as many 10%-plus sell-offs.

But, in 2019, SHOP stock hasn’t had a single double-digit sell-off. Instead, the biggest drop in the stock year-to-date has been 6%. That’s unusual for a richly valued, hyper-growth stock like Shopify. History says that the stock is due for a double-digit sell-off soon.

Beyond history, the fundamentals also look stretched here. I optimistically see Shopify as growing its reach in the global ecommerce market from 1.5% today, to 5-10% over the next several years. Consequently, I see revenues growing at a 30%-plus annualized clip over the next several years.

I also see margins consistently moving higher during that stretch, and believe that 25% operating margins (versus less than 2% guided for 2019) are doable at scale.

Even under those aggressive assumptions, my most optimistic case for Shopify’s EPS by 2030 is $25. Based on a big growth 25 forward multiple, that implies a 2029 price target of $625. Discounted back by 10% per year, that equates to a 2019 price target of roughly $240.

Thus, even in a best case scenario, I think the fundamentals are maxed out around today’s price tag.

Bottom Line on Shopify Stock

Shopify stock is a long term winner, and I’m doubling down on the thesis that this is a stock you want to own for the long haul. Having said that, even the best stocks don’t go up in straight lines forever. SHOP stock has done just that for the past four months, and appears maxed out in the near term.

Consequently, I think the game plan here is simple. Keep a core position. Sell some on this rally. Buy back some on the next pullback.

As of this writing, Luke Lango was long SHOP.