Shopify stock’s 166% rally in 2020 isn’t sustainable

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The COVID-19 pandemic has devastated many businesses around the world. However, it has been a huge positive catalyst for Shopify (NYSE: SHOP). The pandemic forced retailers – including many mom-and-pop stores – to shift their focus to e-commerce. Shopify helped these businesses set up online stores so that they could continue generating revenue, even with little or no traffic to their physical stores.

Shopify stock has responded accordingly. The stock had already surged more than 1,400% between 2016 and 2019, but it has rallied another 166% in 2020. Despite a recent pullback, Shopify stock sits within 10% of its…