4. Shopify Inc. (NYSE:SHOP)
Number of Billionaires: 16
Billionaire Holdings: 1,543,302,895
Shopify Inc. (NYSE:SHOP) aims to be a one-stop shop for small retail enterprises, particularly those who are primarily, only, or initially focused on e-commerce. It has also made significant progress in meeting the needs of enterprise clients. The firm provides a straightforward yet powerful e-commerce platform with other relevant add-on features that come together to make a turnkey solution for SMBs. The quick climb of the business since its 2015 IPO shows a new software market that is expanding quickly and offers a viable answer. Given the financial and operational expenses associated with switching essential e-commerce platforms for clients that already have limited resources, analysts believe the company has created a wide moat.
As a result of the company’s recent string of impressive achievements, the shares responded by rising nearly 24% in the past 12 months. The Gross Merchandise Value increased by 24% in Q4 2024, despite a challenging year-over-year comparison. The firm is doing well in its offline point of sale (“POS”) segment, international and “B2B” segments, and Shopify Plus enterprise business. Shopify Inc. (NYSE:SHOP) is incredibly well-positioned for the direction the world is taking, with growth likely stronger for longer. The company has a highly scalable business model and several strong tailwinds at its back, including e-commerce, mobile commerce, social media, digital payments, seamless omnichannel, DTC, and cloud software digitization.
The company forecasts gross profit dollars to rise at a slightly slower rate in the first quarter of 2025, but revenue growth is anticipated to be in the mid-20% range year over year. After reaching 12% in the first quarter of last year, the free cash flow margin for the first quarter of this year is predicted to reach the mid-teens.
Baron Fifth Avenue Growth Fund stated the following regarding Shopify Inc. (NYSE:SHOP) in its Q4 2024 investor letter:
“Shopify Inc. (NYSE:SHOP) is a cloud-based software provider for multi-channel commerce. Shares rose 32.7% in the fourth quarter, finishing 2024 up 36.5% on strong financial results, including year-over-year revenue growth of 26% thanks to continued market share gains with gross merchandise value growth of 24%. Shopify reported continued success in its original online commerce segment while also expanding into offline, international, and business-to-business (B2B), which grew 27%, 30%, and 145%, respectively. Operating margins of 18% came in 240bps above expectations. While the company again guided for an accelerated pace of reinvestments into the business, which will limit short-term margin expansion, we believe this is the correct long-term strategy, as Shopify is taking advantage of its continuously improving product set and maturing go-to-market, in order to further expand its addressable market, targeting international merchants, offline and B2B retailers and going up market. We remain shareholders due to Shopify’s strong competitive positioning, innovative culture, and long runway for growth, as it still holds less than a 2% share of the global commerce market.”
