Every once in a while, a stock like Shopify Inc. (TSX:SHOP)(NYSE:SHOP) comes along and absolutely blows away expectations. These darling stocks that exhibit out-of-this-world levels of growth and continue to consistently beat on the top and bottom lines each and every earnings report despite increasingly difficult targets set by management, are truly rare. The temptation to jump in and buy shares of these companies with the hopes this growth continues is reasonable.
That said, in many cases, watching these stocks from the sidelines can prove to be the smart move, if one believes more volatility is on the horizon. I’m of the belief that we’re not out of the woods yet with respect to this recession. I think markets are becoming over-exuberant with respect to the lofty valuations which are being placed on high-growth technology companies such as Shopify.
As such, I’d advise investors to keep Shopify in their watch lists for the time being and wait to see how this company performs in the coming quarters. Should the numerous verticals and long runaways of growth lead to consistent profitability, it may make sense to add a position when earnings support its valuation. For now, my opinion is it’s better to be safe than sorry with high-flying stocks like this.
Invest wisely, my friends.
Tech Insider
