SHOP Stock: Shopify Earnings, Revenue Top Estimates On Merchant Business Growth

Shopify (SHOP) on Tuesday reported fourth-quarter earnings and revenue that topped analyst estimates as its merchant business turned in a strong quarter. But SHOP stock fell sharply as analysts mulled the e-commerce firm’s 2024 guidance.


Released before the market open, Shopify earnings for the quarter ending Dec. 31 were 34 cents, excluding one-time items. Also, the Canada-based company’s revenue rose 24% to $2.1 billion.

Analysts polled by Visible Alpha expected Shopify to report a profit of 30 cents a share on revenue of $2.07 billion.

“Q4 operating margin missed consensus by 10 basis points,” said Jefferies analyst Samad Samana in a report. “The Q1 2024 growth outlook was strong, but the operating guidance may limit some enthusiasm. Overall, 4Q delivered versus high expectations, but the valuation and lack of margin upside may keep the stock from pushing higher today.”

SHOP stock tumbled 8.4% to 81.65 in early trading on the stock market today. Heading into the Shopify earnings report, shares were up 15% in 2024, including a 9.4% jump last week.

Shopify Stock: 2024 Outlook

Shopify said Q4 gross merchandise volume from merchant transactions rose 23% to $75.1 billion vs. estimates of $71.53 billion. Merchant solutions revenue rose 21% to $1.6 billion vs. estimates of $1.57 billion.

For full-year 2024, the company expects “revenue to grow at a low-twenties percentage rate on a year-over-year basis, which translates into a year-over-year growth rate in the mid-to-high-twenties when adjusting for the 500 to 600 basis points impact from the sale of our logistics businesses.” Analysts forecast revenue of $8.38 billion, up 19%.

The company in 2023 sold its delivery and logistics business to Flexport, easing Wall Street worries over rising capital spending.

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

Meanwhile, Shopify stock holds a Relative Strength Rating of 95 out of a best-possible 99, according to IBD Stock Check-up.

Follow Reinhardt Krause on X, formerly called Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.


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