Is Shopify a buy after topping $2,000 for a new all-time high?

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Shopify (SHOP.TO) topped $2,000 on the TSX and US$1,600 on the NYSE (SHOP) on Thursday for the first time to reach a new all-time high, but there are two sides to the story investors need to know before buying the stock.

It has had an amazing run, up more than 4,500 per cent over the past five years and 56 per cent over the past year.

Like most high-growth companies, the stock is expensive on a valuation basis. Shopify’s price-to-earnings (PE) ratio is 164. For the sake of comparison, Amazon’s (AMZN) PE is 68.

“We don’t own it and wouldn’t buy it here. The company is fantastic, but the valuation of the shares is nonsensical,” Brian Madden, senior vice-president and portfolio manager at Goodreid Investment Counsel, told Yahoo Finance Canada.

But that doesn’t mean the stock won’t keep going up.

“The charts seem to suggest it will, in the near term at least. It’s a momentum trade and a growth trade at a time when investors seem to be fading the value/cyclicality/back-to-work trade,” said Madden.

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