E-commerce software platform Shopify (NYSE:SHOP) will be reporting results tomorrow morning. Here's what you need to know.
Shopify met analysts' revenue expectations last quarter, reporting revenues of $1.86 billion, up 23.4% year on year. It was an ok quarter for the company, with a significant improvement in its gross margin but a miss of analysts' billings estimates.
Is Shopify a buy or sell going into earnings? Read our full analysis here, it's free.
This quarter, analysts are expecting Shopify's revenue to grow 18.7% year on year to $2.01 billion, slowing from the 30.8% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.20 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Shopify has only missed Wall Street's revenue estimates once over the last two years, exceeding top-line expectations by 2.6% on average.
Looking at Shopify's peers in the e-commerce software segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Squarespace delivered year-on-year revenue growth of 19.9%, beating analysts' expectations by 1.2%, and GoDaddy reported revenues up 7.3%, in line with consensus estimates. Squarespace's stock price was unchanged after the results, while GoDaddy was up 7%.
Read our full analysis of Squarespace's results here and GoDaddy's results here.
Growth stocks have seen elevated volatility as investors debate the Fed's monetary policy, and while some of the e-commerce software stocks have fared somewhat better, they have not been spared, with share prices down 6% on average over the last month. Shopify is down 20.9% during the same time and is heading into earnings with an average analyst price target of $74.1 (compared to the current share price of $53.24).
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