2 Stocks That Could Be Worth More Than Shopify Stock by 2030

Instead of buying Shopify stock at its 52-week high, these two tech stocks can give you better worth for your investment by 2030.

| More on:
A data center engineer works on a laptop at a server farm.

Source: Getty Images

The e-commerce wave that picked up during the pandemic brought 10-year growth in a single year for Shopify (TSX:SHOP). It became the most valued stock on the TSX by market capitalization, replacing the 159-year-old Royal Bank of Canada from its top spot for a brief period. However, the 2022 tech bubble burst saw a correction, and Shopify had to do layoffs and exit the logistics business to sustain the sudden slowdown in revenue growth. Now, Shopify is gradually growing its business. If the stock reaches its 2021 peak of $222 in 10 years from 2020, it could more than double your money by 2030. 

Is Shopify stock a buy now? 

Shopify stock is trading closer to its holiday season peak, growing more than 80% in the last 12 months. This surge has inflated the stock price to 15.6 times its sales per share. It means for every $1 of sales per share, you are paying $15.6. Since e-commerce is a volume-based business, the price-to-sales ratio is the right way to value the stock. 

Shopify’s high valuation made sense when its sales grew 80-100% year over year. But the company’s sales growth has slowed to the 20% range. At this growth rate, 15.6 times value looks expensive. Moreover, Shopify has not given any guidance around accelerated growth except for the holiday season sales. Shopify stock is not a buy at its current peak price of around $110, even from a medium-term perspective. 

If it continues its 20% sales growth, its shares could probably more than double by 2030. 

Two stocks that could be worth more than Shopify stock by 2030 

On the contrary, some tech stocks have a higher probability of growing their valuation steadfastly and being worth more than Shopify by the end of the decade. 

Descartes Systems stock

Shopify exited the logistics business, but Descartes Systems (TSX:DSG) has been consistently growing its logistics and supply chain management business. Logistics is all about efficiency. People, goods, and information travel locally and across borders, and companies keep looking for the most efficient way to get the entire supply chain on one platform and execute the trade from the factory to the doorstep. Descartes’s end-to-end solutions help companies make their supply chain efficient. 

Whenever trade activity increases, Descartes’s revenue increases. Unlike Shopify, Descartes caters to a broader consumer base, from airlines to manufacturers to e-commerce companies. Hence, weakness in one vertical is offset by strength in another, fading any effects of seasonality. 

The company has grown its revenue and improved its net profit margin from 11% in 2020 to 21% in 2023, after five-plus years of stagnant profit margin. Looking at these improving fundamentals, you could buy this stock with confidence, knowing that it will give you a positive return in the long term. It even surpassed its 2021 peak, depicting its resilient growth.  

Descartes stock has the potential to give you 20% compounded annual growth (CAGR) in the next five years. This confidence is better than Shopify’s high volatility, making Descartes a better investment in terms of risk vs. reward.

Dye & Durham 

Unlike Descartes, Dye & Durham (TSX:DND) stock has been in a downtrend, trading 75% below its 2021 peak. The company offers mission-critical software for legal practice management. However, its significant exposure to the real estate vertical and two failed acquisitions caught the stock in a downtrend. The rising interest rates burst the real estate bubble, and companies slashed their tech budget amid business uncertainty. All this affected Dye & Durham’s revenue.

As the economy recovers, the real estate sector will revive and drive DND’s revenue in the long term. The tech company is focused on debt repayment, as rising interest costs are eating its profits. What makes me bullish on the company is its software stickiness and its bottomed-out stock price. 

If Dye & Durham stock returns to its 2021 peak of over $52 in the next five to six years, it could quadruple your money, making it an investment worth more than Shopify. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Descartes Systems Group. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned. 

More on Tech Stocks

Man data analyze
Tech Stocks

3 Reasons Celestica Stock Is a Screaming Buy Now

These three reasons make Celestica stock a screaming buy for long-term investors.

Read more »

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

telehealth stocks
Tech Stocks

Well Health Stock: Buy, Sell, or Hold?

Another record-breaking quarter and strong demand sets the stage for continued momentum for Well Health stock.

Read more »

3 colorful arrows racing straight up on a black background.
Dividend Stocks

TSX Stocks Soaring Higher With No Signs of Slowing

Three TSX stocks continue to beat the market and could soar higher in an improving investment landscape.

Read more »

profit rises over time
Tech Stocks

2 Non-AI Tech Stocks to Buy in November for Better Returns

Not all AI stocks are riding the hype train, and for many investors, well-understood and predictable growth stocks might be…

Read more »

worry concern
Tech Stocks

In a Few Years, You’ll Probably Regret Not Owning BlackBerry Stock

Here’s why I believe BlackBerry could be one of the most overlooked Canadian tech stocks right now.

Read more »

A worker uses a double monitor computer screen in an office.
Tech Stocks

Is Constellation Software Stock a Buy for its 0.25% Dividend Yield?

Here's what investors may want to consider when it comes to Dollarama (TSX:DOL) and its relatively low dividend yield.

Read more »

Nurse talks with a teenager about medication
Tech Stocks

Shares of WELL Health Just Zoomed. Is It a Buy?

Given its improving financials and healthy growth prospects, WELL Health could deliver superior returns over the next three years.

Read more »