If you’re looking for ways to invest in the American dream, then what stock could be better than Canadian e-commerce company Shopify (NYSE:SHOP)?
That’s right. Shopify may be headquartered in our neighbor to the north, but the cloud-based commerce platform is a huge tool for small- and medium-sized businesses that fuel the U.S. economy.
And despite the near-term pullback in the market from coronavirus fears, Shopify and SHOP stock show no signs of slowing down.
For the fourth quarter, SHOP reported earnings of 43 cents per share, beating analysts’ expectations of 24 cents. The company also beat on revenue of $505.2 million, which was better than the expected revenue of $482.1 million.
For 2020, Shopify says it expects revenue of $2.13 billion to $2.16 billion, which is better than consensus estimates of $2.11 billion.
Shopify Will Survive the Coronavirus
I don’t think it’s wise to downplay the impact the coronavirus could have on the markets. Already we’ve seen a drop of 3,000 points. Companies are slowing production and cancelling events, and communities are making plans for school closures.
But it’s important to realize that a huge portion of the selloff in recent days is the result of speculation and fear, not fact. The CBOE Volatility index (VIX), or fear index, that gauges market volatility is at 46.1, which is its highest level since the 2008 financial crisis.
Markets are in good shape, fundamentally, and were repeatedly setting record highs as recently as a couple of weeks ago. Investors hate uncertainty. They don’t know to what expect next regarding the coronavirus in the U.S. and are selling accordingly.
All that said, Shopify stock remains a solid bet on the long-term health of the American economy in the 21st century. Small- and medium-sized businesses make up the vast majority of companies in the U.S. Shopify helps them sell their products online.
It allows people with small business to function without the need of hiring bookkeepers and marketing departments. Avoiding that overhead relieves Shopify users of a huge burden, and is very appealing to younger entrepreneurs looking to make their own mark on the world.
Why Shopify Stock Is a Long-Term Winner
Since its May 2015 initial public offering, SHOP stock is up nearly 1,500% and reached nearly $600 per share before COVID-19 fears sapped the market. And now that the coronavirus sell-off pushed SHOP down to about $450, shares are priced at a comparative bargain.
My Portfolio Grader has SHOP stock at an A rating right now, in part because of its sales growth and its success at topping expectations with earnings.
Shopify is settling in to be one of the leading stocks in the e-commerce space and a valuable tool for people looking to start their own businesses.
What could be more American than that?
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
