Seemingly everyone is bullish on e-commerce solutions provider Shopify(NYSE:SHOP). Over the past several weeks and months, multiple Wall Street analysts from KeyBanc to Roth to Baird have sounded the bull horn on SHOP stock as they believe the company is firing on all cylinders right now. Investors are gobbling up the stock. No one is selling. SHOP stock has rallied 65% year-to-date and is up 92% from up its December 2018 lows.

In other words, SHOP stock has nearly doubled over the past four months.

There’s a reason for this big rally. It is becoming increasingly obvious that the future of retail is not only direct, but also decentralized, and Shopify is the backbone of this decentralized direct retail world. The company commands a relatively small share of the global retail market today. Thus, as decentralized direct retail gains traction over the next several years, Shopify has a huge opportunity to grow market share and turn into a global technology giant.

Consequently, the long-term growth narrative supporting SHOP stock is very healthy, and SHOP stock is ultimately one of the best growth stocks in the market.

Having said that, even as a long-term bull, I’m a bit cautious on Shopify stock ahead of earnings. As mentioned earlier, everyone is bullish on SHOP. That means this company needs to report not just good first-quarter numbers or even great first quarter numbers. Shopify needs to report perfect first-quarter numbers in order for the stock to rise after earnings.

Is that possible? Yes. Is it likely? No.

Perfection is never likely, even for a winner like Shopify. As such, while SHOP stock still looks great long term, investors have a right to be cautious ahead of earnings.

Shopify Stock Is A Long Term Winner

The long-term bull thesis on Shopify stock boils down to two things. One, decentralized direct retail is the future of commerce. Two, Shopify is the backbone of decentralized direct retail.

On the first point, we are increasingly pivoting into what I call the coordinated economy. Broadly speaking, the widespread proliferation of the internet has produced an era of unprecedented connectivity. This connectivity can be leveraged to coordinate the masses to do only what the few were doing before, thereby producing more supply than ever and creating optimal outcomes for consumers.

The idea sounds complex. It’s not.

Let’s tackle the retail example. Before, only Walmart (NYSE:WMT) and Target(NYSE:TGT) could sell goods and products to consumers, since doing so required having a physical store presence. Now, thanks to the internet, anyone can build a digital store and sell any item to any interested buyer. This is decentralized direct retail. Net result? There are infinitely many suppliers in the retail world — not just two — so supply now equals demand. As supply has caught up to demand in the retail world, prices have dropped and consumer convenience has risen.

Consequently, the world has increasingly pivoted toward decentralized direct retail over the past few years. It will continue to do so with a greater pace over the next few years, too.

On the second point, Shopify is the backbone of this decentralized direct retail trend. Long story short, in order for individual sellers to be attracted to the idea of selling online, they need to be given the adequate e-commerce sales tools to compete with the likes of Walmart and Target. Shopify provides those tools, and they are better than anyone else at doing so. So long as this remains true, then Shopify will remain the backbone of the decentralized direct retail trend, and SHOP stock will head higher.

Caution Is Warranted In the Near Term

In the big picture, Shopify stock is a winner because the company is providing the building blocks for the future of retail. Ultimately, that dynamic will propel SHOP stock significantly higher in a long-term window.

Having said that, caution is warranted on SHOP stock ahead of the company’s first-quarter earnings report. This stock has come very far, very fast, and almost everyone is sounding the bull horn. That implies an unfavorable risk-reward set-up going into earnings. If the company reports perfect numbers, the stock likely won’t pop much because it has already rallied in such a big way. Meanwhile, if the company reports anything less than perfect numbers, the stock will likely fall because it’s priced for perfection at 22-times trailing sales.

In other words, the risk-reward profile on SHOP stock ahead of earnings isn’t the best. As such, caution is warranted here. I think the numbers will be good. But, good enough to warrant further upside in the stock right now? Probably not. My numbers suggest that the stock is already fully priced at $225.

Bottom Line on SHOP Stock

Shopify stock is a long-term winner. Because of this company’s robust long-term growth fundamentals, I’m doubling down on this stock as a long-term buy-and-hold. But, you don’t want to buy long-term buy-and-hold stocks after they’ve nearly doubled in four months. If anything, you want to do some profit taking, keep a core position, and then add more on the next big pullback.

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