Shopping for Shopify

Shopify (NYSE: SHOP) helps more than 600,000 businesses sell their products online. It offers more than 100 website templates to help customize the experience, and it can provide services such as invoicing, order tracking, payment processing and shipping integration, too. The recurring revenue that’s generated should help Shopify prosper for years to come.

Shopify has been so successful catering to the needs of small- and medium-sized merchants that it has added enterprise-level options for larger companies, which tend to spend more than their smaller counterparts. It’s also focusing on international growth, as currently most of its customers are located in the United States.

The company has chosen to forgo profits (for now) in exchange for a rapid expansion (its secondquarter revenue soared 62 percent over year-earlier levels). That’s not uncommon for young and fastgrowing companies, and increasing sales and more recurring revenue should eventually deliver earnings. Meanwhile, Shopify’s stock price has soared more than 700 percent over the past five years.

Management forecasts revenue of about $1 billion for the full year, which would be a 48 percent jump over last year. With its massive international opportunity and the paradigm shift to e-commerce that is just getting started, Shopify is a promising portfolio candidate for risk-tolerant long-term investors. (The Motley Fool owns shares of and has recommended Shopify.)