Shopify Earnings Preview: Here’s What To Watch For

Shopify (SHOP) will report its 2021 first-quarter results on April 28 before the market opens. Over the past year, shares of the e-commerce platform have soared by more than 50%. But this year, the stock price has dropped 1% year-to-date and is currently trading at approximately C$1,415 per share. Strong results could propel the stock higher, so let’s have a look at what analysts are expecting.

The Zack Consensus Estimates for earnings is $0.78 per share, representing a growth of 310.53% from the prior-year quarter. The estimated revenue is $853.04 million, indicating an increase of 81.5% from the first quarter of 2020.

Shopify reported adjusted earnings of $1.58 per share in the previous quarter, which more than tripled from the prior-year quarter. The result also beat the consensus estimate of $0.37. Also, revenue jumped 94% to $977.7 million and exceeded analysts’ expectations of $906.82 million.

Although the company expects to capitalize on ongoing growth trends, it hasn’t provided formal guidance for the first quarter or 2021.

Shopify’s performance in the first quarter is expected to have benefited from the surge in online sales, which have been triggered by the COVID-19 pandemic amid an e-commerce boom. (See Shopify stock analysis on TipRanks)

Last week, Robert W. Baird analyst Colin Sebastian assigned a Buy rating on the stock. He lowered his price target to $1550 (C$1,931.46) for a 37.6% upside potential.

Sebastian raised his estimates for 2021 following an updated merchant survey and robust e-commerce data in the first quarter while simultaneously lowering its operating margin targets as the company enters the next investment cycle. He said he would be a buyer on any pullbacks of Shopify stock.

The rest of the Street is cautiously optimistic about SHOP with a Moderate Buy consensus rating based on 12 Buys, 16 Holds, and 1 Sell. The average analyst price target of C$1,831.63 implies an upside potential of about 30.3% to current levels.

On top of that, Shopify scores an 8 out of 10 on the TipRanks Smart Score rating system, indicating that the stock has strong potential to outperform the overall market. The TipRanks Smart Score is derived from 8 unique data sets, including Analyst recommendations, Crowd Wisdom, Hedge Fund Activity, Media Sentiment, and multiple Technical stock factors.