Why Shopify Inc. Stock Surged 16.5% in February

By Joe Tenebruso Markets Fool.com

What

Continue Reading Below

Shares ofShopify(NYSE: SHOP)leapt 16.5% last month, according to data provided byS&P Global Market Intelligence. Shopify's strong start to 2017 continues, with February's gains coming after an 18.5% rise in January.

Image source: Getty Images.

So what

Helping to fuel this rally was Shopify's impressive fourth-quarter results on Feb. 15, which saw revenue surge 86% year over year, to $130 million.Merchants continue to flock to Shopify's platform -- more than 375,000 businesses now rely on the multichannel commerce company for their sales and back-office software needs. That's up from 325,000 in the third quarter and 243,000 in the fourth quarter of 2015.

In all, these merchants generated $5.5 billion in gross merchandise volume-- the total dollar value of orders processed on Shopify'splatform -- representing year-over-year growth of 94%.

Continue Reading Below

Now what

As the leading cloud-based commerce software for small- and medium-sized businesses, Shopify is uniquely positioned to benefit as more and more retail sales migrate online -- and the company is investing aggressively to extend its lead in this rapidly growing market."Throughout 2017 we will continue to build out our ability to seize this opportunity by expanding not only our existing features, such as channels, payments, shipping and capital, but also our facilities and infrastructure," CFO Russ Jones said in Shopify's fourth-quarter earnings release.

With so much growth up for grabs, Shopify is wise to focus on maximizing sales rather than emphasizing profits at this point in time."We would be crazy not to capitalize on the evolutionary moment in the development of retail," Jones said during a conference call with analysts.

With Shopify's stock already up another 7% so far in March, investors appear to agree. If you do, as well, perhaps you should consider buying Shopify today.

10 stocks we like better than Shopify
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Shopify wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of February 6, 2017

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Shopify. The Motley Fool has a disclosure policy.