It\u2019s now over a year since Shopify (Shopify Stock Quote, Chart, News, Analysts, Financials TSX:SHOP) first lifted past Royal Bank as Canada\u2019s largest company on the Toronto Stock Exchange, and talk seems to have died down a bit on whether SHOP has the staying power to keep that crown (so far, so good). So too have the comparisons with past tech flameouts like Nortel Networks and Research in Motion, again, at least for the time being. But for portfolio manager John Zechner, Shopify\u2019s resemblance to Nortel during the dot-com era is accurate at least in terms of SHOP\u2019s now-dominant presence in the Canadian markets. Zechner says pair that with an inflated valuation and Shopify becomes an overly pricey stock that\u2019s nonetheless difficult to avoid. \u201cI have certainly not been the voice of expertise on Shopify because I\u2019m probably like a lot of other money managers \u2014we just can\u2019t bring ourselves around to the valuation,\u201d said Zechner, chairman of J. Zechner Associates, who spoke on BNN Bloomberg on Thursday. \u201cThe stock has continued to trade up but on the other hand they\u2019ve delivered the growth and they continue to build up the platform, adding retailers en masse, expanding their offerings and just creating a super company in the process,\u201d he said. \u201cBut there\u2019s a difference between a good or great company and a good stock, and I just see at these valuation levels \u2026 I mean, for $4 billion in annualized revenue right now you got a $170 to $180 billion market cap \u2014 it just seems really extended,\u201d Zechner said. \u201cYou\u2019ve got to deliver so much future growth in order to justify that valuation.\u201d Make no bones about it, Shopify has been consistent over the years in its ability to exceed expectations, a trait fully on display over the past year where the company\u2019s success during a pandemic-impacted 12 months was monumental. Want evidence? Shopify\u2019s first quarter results earlier this year saw overall revenue jump 110 per cent year-over-year to just under a billion dollars at $988.6 million, while earnings climbed to $2.01 per share. Both numbers smashed through analysts\u2019 estimates at $862.7 million and $0.75 per share respectively. The company\u2019s balance sheet is looking good, too, with almost $8 billion in cash and equivalents. Shopify gave a note of caution in its guidance with the Q1 report, saying 2021 more than likely won\u2019t see the accelerated growth in e-commerce as did 2020, while management nonetheless kept up its confidence in SHOP\u2019s platform and the onboarding of new merchants. \u201cShopify\u2019s momentum continued into 2021 as digital commerce tailwinds remained strong and merchants took advantage of the range of capabilities offered by our platform,\u201d said Shopify CFO Amy Shapero in a press release. \u201cWe are focused on building a commerce operating system that will help shape the future of retail. Our merchant-first business model positions us to capture the massive opportunity presented by the growth of digital commerce, benefiting both our merchants and Shopify.\u201d And even though Shopify continues to sport a heady valuation (at about 400x forward earnings), believers see huge potential for growth where SHOP has still only captured a fraction of its global addressable market. But Zechner is having nothing of it, at least for now. \u201cI\u2019ve seen stocks get ahead of themselves and I\u2019ve been wrong on this call, but still, you can\u2019t drag me kicking and screaming to pay up to these kinds of levels at this point,\u201d Zechner said. \u201cNow, the problem for a lot of money managers is when Shopify was a small part of the index didn\u2019t matter,\u201d he said. \u201cNow that it\u2019s the largest part of the index and it\u2019s six or seven per cent weighting, on these days when Shopify has a strong move it\u2019s very hard for us to beat the market because it\u2019s the biggest part of the index. It\u2019s almost like Nortel back in the mid-90s and late 90s. Nortel was so dominant in the index that, you know, don\u2019t own it at your own risk.\u201d \u201cSo, I don\u2019t own it in here. It\u2019s a great company and I will keep my eye on it and maybe at a point we\u2019ll change our minds but the valuation just is too much for me to handle in any sort of conservative, standard portfolio,\u201d Zechner said. Shopify finished the week up three per cent to $1,862.97, with the stock closing briefly mid-week above $1,900 for the first time. SHOP\u2019s meteoric rise has been nothing short of remarkable, with the stock sitting at $200 as recently as early 2019. Shopify\u2019s market capitalization stands at $231 billion in comparison to Royal Bank at $180 billion. The total market cap of companies listed on both the TSX and TSX Venture Exchange is $3.3 trillion, which puts SHOP\u2019s weighted percentage at about seven.