Investing in growth stocks can be a great way to boost your portfolio’s value, as long as you balance it well. Growth stocks have the potential to provide high returns faster than blue-chip stocks, but they also come with high risk.
While some growth stocks outperform the market by a large margin, others can result in losses. Choosing the right growth stocks for your portfolio is crucial for achieving your long-term financial goals. Investing in TSX stocks with solid long-term growth potential can be very rewarding.
One such example is Shopify (TSX:SHOP), which experienced rapid growth after its IPO. However, the tech bubble burst, causing the stock to decline. Despite being down from its highs, Shopify may still be a good addition to your portfolio.
Shopify became the largest TSX stock by market capitalization in just three years, driven by the increasing demand for e-commerce solutions during the pandemic. As the leading e-commerce platform provider, Shopify benefitted greatly from the surge in online shopping.
However, as the world transitioned out of the pandemic, Shopify’s growth became unsustainable. The stock price declined further due to investor pullouts and broader economic challenges. Currently trading at $91.91 per share, Shopify may be considered undervalued given its future growth potential.
Despite challenges, Shopify remains a solid company with a Software-as-a-Service business model and positive earnings. Analysts believe that Shopify will continue to capture a larger share of the growing e-commerce industry.
In conclusion, Shopify’s established position in a growing industry makes it an attractive investment. While short-term economic factors may lead to fluctuations in the stock price, Shopify’s high-margin verticals should support its long-term growth. As long as Shopify continues to innovate and expand, it could be a promising investment for growth-seeking investors.