Store Stocks: Shopify Earnings Beat Estimates, Revenue Growth Re-accelerates

e-commerce company stock Shopify (SHOP) surged Thursday after the company reported a smaller-than-expected loss for the September quarter and revenue beat analysts’ expectations. SHOP stock rose by double digits on the news.


Canada-based Shopify said it posted an adjusted loss of 2 cents per share. Revenue from SHOP stock rose 22% to $1.4 billion, the company said. Revenue growth re-accelerated after six quarters of slowdown as the coronavirus pandemic subsided and online shopping normalized.

Analysts expected Shopify to report a loss of 7 cents on revenue of $1.34 billion. A year ago, Shopify earned 8 cents a share on revenue of $1.12 million. The third-quarter results included the recently acquired logistics company Deliverr.

SHOP shares surged 17.3% in the stock market today to close at 34.10. Before Thursday, Shopify stock was down 78% in 2022 in a bear market.

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

SHOP Inventory Exceeds Expectations

“At first glance, we think Shopify’s September quarter sales beat expectations, reflecting its ability to capitalize not only on online e-commerce opportunities, but also offline retail,” DA Davidson analyst Tom Forte said in a note to clients. One; for example, working through its point of sale.”

He added that Shopify “could benefit from the strength of the U.S. dollar against the Canadian dollar, with its revenue in U.S. dollars and many operating expenses in Canadian dollars.”

Evercore ISI analyst Mark Mahaney said in his report: “Shopify has shown that it is willing to manage expenses through layoffs and marketing spend discipline to protect profits or reduce losses. That’s exactly what the market wants today.”

In addition, total merchandise from merchant customers was $46.2 billion, up 11% and slightly below expectations of $46.87 billion.

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

At the same time, the company plans to cut 10% of its workforce. According to the IBD Stock Check-up, SHOP stock has a Relative Strength Rating of 13, with a possible as high as 99.

Follow Reinhart Krauss on Twitter @reinhardtk_tech Updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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