One of the biggest e-commerce stocks on the TSX, Shopify (TSX:SHOP) remains a top growth stock many investors are focused on. That's partly because the company's growth rate has re-accelerated of late, while its post-pandemic comps are now a thing of the past.

The question moving forward is whether Shopify remains a growth stock investors still want to put fresh capital in, or if this is a company that's best avoided â particularly if a recession is ahead.

Let's dive in.

If we do get a recession, Shopify could see downside

There are certainly risks with investing in a software-as-a-service company like Shopify right now. If you're one of the millions of investors that's worried about an impending recession (particularly as the yield curve steepens), this is a stock that could see significant downside.

Earning the majority of its revenue via transaction fees on its platform, Shopify's growth rate is closely tied to e-commerce growth around the world. With a business that extends into 175 countries, there is some diversification there. And lower interest rates should help the company from a valuation standpoint. But any sort of protracted broad decline in e-commerce volumes is a risk to be considered.

Growth has been strong thus far

On the other side of the coin, Shopify's recent year-over-year growth rate in Q1 has impressed many in the market. While SHOP stock has seen some volatility of late, so long as these growth metrics remain in place, there's a solid case for upside from here.

The company reported 29% year-over-year revenue growth this past quarter, adjusted for the sale of its logistics business. This was driven by gross merchandise value (GMV) growth of 23% globally, and merchant solutions revenue growth of 20%.

If these numbers persist, there's a strong case to be made that owning Shopify makes sense here.

So, is it a buy?

It's my view that Shopify likely isn't a stock every investor should own. This company is certainly cyclically sensitive, and there are risks tied to a potential recession to take into account.

On the other hand, the company has strong secular growth tailwinds that are hard to ignore. So, for those looking to load up a TFSA with a growth stock to buy, dollar cost averaging into this name may be the best course of action from here.

The post Is It Still Prudent to Invest in Shopify Stock? appeared first on The Motley Fool Canada.