As we sail into 2025, two Canadian stocks are catching the eye of investors: Shopify (TSX:SHOP) and Cineplex (TSX:CGX). These companies operate in vastly different industries. But both have demonstrated resilience and adaptability. Whether you’re looking for a high-growth tech play or a recovering entertainment stock with strong consumer demand, these two names are worth watching.
Image source: Getty Images
Shopify
Shopify stock, the Ottawa-based e-commerce giant, continues to prove why it remains a dominant force in the online retail space. The company’s latest earnings report revealed a 31% year-over-year revenue increase in the fourth quarter of 2024, reaching $2.81 billion, surpassing analysts’ expectations. Earnings per share (EPS) came in at $0.44, slightly beating the anticipated $0.43. The company’s gross merchandise volume (GMV), which represents the total sales made through its platform, also saw a strong 24% uptick to $94.4 billion. This is a clear sign that merchants continue to rely on Shopify stock’s platform, even as broader economic concerns linger.
One of Shopify’s most exciting developments is its expansion beyond traditional small-business e-commerce. It recently secured partnerships with major brands like Reebok and Warner Music Group, further cementing its position as a go-to platform for global merchants. Its continued investment in artificial intelligence (AI)-driven tools, logistics, and B2B e-commerce suggests it has plenty of room to grow. While the company expects revenue growth to slow slightly in the first quarter of 2025 to the “mid-20s” percentage range, Shopify stock is still on track to deliver impressive results as it scales internationally.
Cineplex
Cineplex is experiencing a resurgence as moviegoers return to theatres in full force. The company’s third-quarter results showed a strong recovery, with box office revenues hitting $175 million. That’s 98% of 2019 pre-pandemic levels. Total revenue reached $395 million, slightly below last year’s record-breaking quarter. This quarter had the benefit of massive blockbusters like Barbie and Oppenheimer.
However, what stands out is Cineplex’s ability to generate more revenue per patron than ever before. The company set new all-time records for box office per patron (BPP) at $13.19 and concession per patron (CPP) at $9.85. This suggests that while audiences may be slightly more selective about what they see in theatres, they are willing to spend more on premium experiences.
Premium formats like IMAX and VIP theatres accounted for 42.2% of Cineplex’s total box office revenue, reinforcing a shift towards high-end movie experiences. Beyond traditional theatre operations, Cineplex is diversifying its revenue streams. Cineplex Digital Media saw a 40.3% year-over-year revenue growth, and its Location-Based Entertainment segment, which includes attractions like The Rec Room and Playdium, brought in $31.1 million in revenue. With several new locations opening and a promising film slate ahead, Cineplex is well-positioned for further gains.
Bottom line
For investors, these two stocks represent different opportunities. Shopify stock is a high-growth company with a strong competitive moat in the e-commerce industry, making it an appealing choice for those willing to ride out some volatility. Its ability to keep expanding internationally while strengthening its partnerships with major brands shows that it still has plenty of growth potential. Meanwhile, Cineplex is a compelling recovery play. The company has managed to claw its way back from the pandemic-era slump and is now benefiting from pent-up demand for premium movie experiences. It is also taking strategic steps to grow beyond traditional theatre revenue, which could make it a more well-rounded investment in the long run.
Both stocks have risks. Shopify stock’s valuation remains high, and its forward price-to-earnings ratio suggests that much of its future growth is already priced in. Any sign of slowing momentum could lead to sharp pullbacks. Cineplex, while showing strong operational improvements, still carries significant debt and is vulnerable to changes in consumer discretionary spending. If economic conditions worsen, people may cut back on entertainment expenses.
That being said, both companies have demonstrated resilience and an ability to evolve with changing market conditions. Shopify has proven that it can continue to grow despite broader economic challenges, while Cineplex has found ways to enhance the moviegoing experience and drive revenue per customer higher. Investors looking for growth and recovery plays in the Canadian market should keep an eye on these two stocks as they head into 2025.
