Shopify (TSE:SHOP) was once the ultimate answer to store closures in the wake of the pandemic. Going online was the only real option for retail, and Shopify got them there. Now, after the pandemic, Shopify is working to secure its position, and its latest earnings report suggests it did just that. Investors were wild about it, and sent shares up over 24% in Tuesday morning’s trading.
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Shopify earnings were a marvel. They came in at $0.64 per share, and with TipRanks data looking for $0.27 per share, that was a clear win by literally any standard. And it got better; Shopify brought in revenue of $2.16 billion, which also passed the analyst projections looking for $2.12 billion.
Further, gross merchandise volume exploded upward, surging to $69.7 billion, an increase of 24% against the third quarter of 2023. FactSet analysts expected just $68.1 billion, another win. Harley Finklestein, Shopify’s president, noted that Shopify is “…well-positioned for extensive growth across different merchant segments, size, geographies, channels and products.”
It’s Beginning to Look a Lot Like a Winning Christmas
And Shopify does not look to stop there. A FactSet consensus looked for 22.8% revenue growth in the current quarter. Shopify itself, meanwhile, looks to bring in “mid-to-high twenties” for growth percentages, which should readily beat the consensus figures.
It certainly will help that Shopify counts a wide range of brands to its credit, including Off-White, a luxury fashion brand, handbag maker Vera Bradley, shoe company Reebok, and even film studio Lionsgate Entertainment (NYSE:LGF.A) as organizations that put Shopify tools to work.
Moreover, Shopify has a slew of smaller brands that it works with, which all will contribute to what should be a major holiday quarter, even in the midst of shoppers pulling back on their spending.
Is Shopify a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:SHOP stock based on 11 Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After an 81.28% rally in its share price over the past year, the average TSE:SHOP price target of C$118.87 per share implies 23.8% downside risk.
