E-Commerce software platform Shopify (NYSE:SHOP) will be reporting earnings tomorrow after the bell. Here's what investors should know.
Last quarter Shopify reported revenues of $1.73 billion, up 25.7% year on year, beating analyst revenue expectations by 5.11%. It was a strong quarter for the company, with a decent beat of analyst estimates and solid revenue growth.
Is Shopify buy or sell heading into the earnings? Read our full analysis here, it's free.
This quarter analysts are expecting Shopify's revenue to grow 19.2% year on year to $1.44 billion, slowing down from the 21.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.04 per share.
The analysts covering the company have been growing increasingly bullish about the business heading into the earnings, with revenue estimates seeing seven upwards revisions over the last thirty days. The company missed Wall St's revenue estimates three times over the last two years.
Looking at Shopify's peers in the sales and marketing software segment, some of them have already reported Q1 earnings results, giving us a hint what we can expect. VeriSign delivered top-line growth of 5.04% year on year, missing analyst estimates by 0.8% and Braze reported revenues up 40.1% year on year, exceeding estimates by 3.05%. Both companies (VeriSign and Braze) traded flat on the results. Read our full analysis of VeriSign's results here and Braze's results here.
There is still much uncertainty in the markets. The Federal Reserve's hawkish stance on rates, meant to tame inflation, remains a key market narrative. There is an added wrinkle now with troubles in the banking sector, trigger by Silicon Valley Bank's fairly sudden and surprising collapse. Given these, the question is whether higher rates (which dampen economic activity) and potentially less lending from the overall banking sector will trigger a recession. While some tech stocks have recovered year-to-date, most are still well off their 52-week highs. Shopify is down 1.95% over the last month, and is heading into the earnings with analyst price target of $44, compared to share price of $46.66.
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The author has no position in any of the stocks mentioned.