Shopify (NYSE: SHOP) Shares rose 37% in 2024, according to data provided by S&P Global Market Intelligence. The market is more excited about the e-commerce platform as it continues to post robust growth and improving profitability as the e-commerce market grows, and moderating inflation could boost consumer spending.

Shopify is the infrastructure behind millions of eCommerce retailers. Its core customer is a small to medium-sized business that signs up for a complete package that includes a website and e-commerce functionality, but it has expanded to offer multiple types of packages and unique services that also appeal to large businesses. customers .

It has had a bumpy road over the past few years as it managed through accelerated acceptance of the pandemic, built too much to meet dwindling demand and then got rid of unnecessary infrastructure. It has landed in an excellent spot, becoming profitable again as it scales on a more linear path.

Revenue rose 26% year over year in the third quarter and beat expectations, and operating income more than doubled to $283 million. It has expanded its free cash flow margin every quarter this year, and management is targeting similar performance in the fourth quarter.

Shopify is growing profitably, but its growth story is far from over. It has identified multiple areas to focus on expansion, including internationally, where it is only the fourth largest e-commerce sales platform. International gross merchandise volume (GMV) increased more than 30% in the third quarter, higher than the company’s total of 23.6%, and international merchants are gaining value by joining the platform.

Traders who joined the Managed Markets program, which offers a full international setup, sold to an average of 83 countries and saw international sales increase by more than 40% on average. Shopify is also expanding its product assortment to international locations around the world.

It also adopts the omnichannel model and offers more comprehensive solutions for both online and offline retailers, and GMV also exceeded the company’s total during the quarter.

The only real downside here is the stock’s valuation. Shopify trades stocks to a rich man One-year P/E ratio of 54. If Shopify has years of growth ahead of it, which it does, investors can still expect the stock to rise over time. Some of the growth is built into that, but it will eventually outpace it, and the stock is likely to reward patient investors.

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