Shopify (NYSE: SHOP) shareholders have experienced an eventful five years. The stock surged into the stratosphere during the pandemic's height, only to lose up to 87% of its value when people resumed their offline shopping habits in 2022.

Although it has experienced a considerable resurgence since then, it still sells for less than 50% of its 2021 high. The question for investors is whether it can beat the market over the next five years, or whether business conditions are likely to derail its recovery.

Where Shopify stands as a company

Shopify began as a merchant solution. It stood out in the highly competitive e-commerce platform environment by offering highly customizable, no-code websites. Because slow website speeds can lose sales, Shopify also emphasized rapid transactions.

Nonetheless, Shopify has expanded its competitive advantage by offering ancillary services that can make it a one-stop shop for all e-commerce needs. Hence, services as diverse as payment handling, social media management, and raising capital can be handled through Shopify.

Shopify also tried to build on this by adding a fulfillment and shipping business. However, the high costs (and likely low margins) of offering such services prompted Shopify to sell its logistics arm. Selling that business has allowed Shopify to return to profitability, which could bode well for the company over the next five years.

Grand View Research forecasts a compound annual growth rate (CAGR) for the e-commerce industry of 19% through 2030. This should mean good things for Shopify, even if it cannot attract customers through offering logistics.

Shopify's finances and stock

As for the financials, one way to gauge where Shopify is going is to look at the revenue levels of the last few years. Investors will probably see a marked deceleration in revenue growth.

Revenue growth levels had slowed by 2019, when they fell below 50%. Nonetheless, the pandemic created unexpected demand for online shopping, leading to massive revenue increases in 2020 and 2021. Since then, revenue growth has slowed dramatically.

Data source: Shopify annual reports from 2023, 2021, and 2019.

Price increases in 2023 might have obscured that effect. Still, customers can mitigate that effect by switching to cheaper yearly plans.

Investors should also remember that Shopify earned $3.9 billion in revenue in the first half of the year. Almost 73% of that came from its merchant solutions rather than the sites themselves, meaning the price increases may have had little effect on growth.