SHOP Stock: Shopify Earnings Beat, Revenue Growth Reaccelerates

Shares of e-commerce firm Shopify ( SHOP ) soared Thursday after the company reported a smaller-than-expected loss for the September quarter and revenue that beat analysts’ estimates. SHOP inventory was on the news by double digits.


Canada-based Shopify said it lost 2 cents per share on an adjusted basis. Revenue for SHOP shares rose 22% to $1.4 billion, the company said. Revenue growth accelerated again after six quarters of slowing growth due to the coronavirus pandemic fading and normalizing online shopping.

Analysts had expected Shopify to report a loss of 7 cents on revenue of $1.34 billion. A year earlier, Shopify earned 8 cents per share on revenue of $1.12 million. Third quarter results include recently acquired logistics firm Deliverr.

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SHOP stock rose 17.3% to close at 34.10 on the stock market today. Before Thursday, Shopify shares had retreated 78% in 2022 amid the bear market.

“The results showed that SHOP inventory is not out of the woods but making positive progress,” Jefferies analyst Samad Samana said in a note to clients.

STORE Inventory exceeds expectations

At DA Davidson, analyst Tom Forte said in his note to clients: “First, we see Shopify’s sales beating expectations for the September quarter as a reflection of its ability to exploit not only the online e-commerce opportunity , but also the offline retail. one; for example with its point of sale efforts.”

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He added that Shopify “may have benefited from the strength in the US dollar against the Canadian dollar with its revenues in US dollars and many of its operating expenses in Canadian dollars.”

At Evercore ISI, analyst Mark Mahaney said in his note: “Shopify is showing that it is willing to reduce expenses – through layoffs and marketing spending discipline – to protect profits or reduce losses. That’s exactly what the markets want these days. .”

Additionally, merchant customer gross merchandise volume was $46.2 billion, up 11%, slightly below estimates of $46.87 billion.

Shopify sets up e-commerce sites for small businesses, and partners with others to handle digital payments and shipping.

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Meanwhile, the company plans to cut 10% of its workforce. SHOP stock has a relative strength rating of 13 out of a possible 99, according to IBD Stock Check-up.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.


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