Shopify SHOP is scheduled to report its first-quarter 2024 results on May 8.
For the to-be-reported quarter, Shopify expects revenue growth in the low twenties on a year-over-year basis. Adjusting for a 500-600 bps headwind related to the divestiture of the logistics business, revenues are expected to grow in the mid to high twenties on a year-over-year basis.
The Zacks Consensus Estimate for revenues is currently pegged at $1.84 billion, suggesting growth of 21.76% from the year-ago quarter’s reported figure.
The consensus mark for earnings is pegged at 16 cents per share, unchanged over the past 30 days. Shopify reported earnings of 1 cent per share in the year-ago quarter.
Shopify is benefiting from strong growth in its merchant base, a trend surely to be reflected in first-quarter results. Merchant-friendly tools like Shop Pay, Shopify Collective, Shopify Audiences, Shopify Capital and Shop Cash offers are helping it win new merchants regularly amid a challenging economic environment. Shopify’s platform is widely used by small and medium businesses that are suffering from persistent inflation.
Shopify Inc. Price and EPS Surprise
Shopify Inc. price-eps-surprise | Shopify Inc. Quote
Shopify shares have lost 4.4% in the year-to-date period, underperforming the Zacks Computer & Technology sector’s return of 10.8%. However, in the past month, SHOP shares have gained 0.1%, outperforming the sector, which has lost 0.3%, reflecting the benefits of steady consumer spending. The company currently has a Zacks Momentum Score of A, which makes it further attractive.
Innovative Portfolio Facilities Merchant Expansion
Shopify has been investing profusely in developing the best solutions for modern e-commerce. Product offerings like Shop Pay, Bill Pay, Tax Platform, Collective and the Marketplace Connect app.
Integration of AI through Shopify Magic across products and workflows is helping merchants expand their footprint. Shopify Checkout is helping merchants offer secure and seamless checkout options for customers. In January, the company launched updates, including One-page Checkout and Checkout Extensibility, making it more user-friendly.
Merchant expansion is expected to have aided Gross Merchandise Volume (GMV) growth in the to-be-reported quarter. The Zacks Consensus Estimate for GMV is currently pegged at $60 billion, indicating 21% year-over-year growth.
Moreover, the consensus mark for first-quarter Subscription solutions revenues is pegged at $506 million, indicating 32.4% year-over-year growth. The Zacks Consensus Estimate for Merchant Solutions is pegged at $1.33 billion, suggesting 17.7% year-over-year growth.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s the exact case here.
Shopify has an Earnings ESP of +1.63% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Hence, we believe investors would be wise to accumulate Shopify prior to the first-quarter results, given the attractive entry point on the back of strong fundamentals.
Other Stocks to Consider
Here are a few other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings in their upcoming releases:
Arista Networks ANET has an Earnings ESP of +3.76% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have gained 11.6% year to date. ANET is set to report its first-quarter 2024 results on May 7.
NVIDIA NVDA has an Earnings ESP of +2.50% and a Zacks Rank #2.
NVIDIA’s shares have gained 74.5% year to date. NVDA is scheduled to release first-quarter fiscal 2025 results on May 22.
Docebo DCBO has an Earnings ESP of +8.00% and a Zacks Rank #3 at present.
Docebo’s shares have declined 5.7% year to date. DCBO is set to report first-quarter 2024 results on May 9.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Only $1 to See All Zacks’ Buys and Sells
We’re not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not – they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
Shopify Inc. (SHOP) : Free Stock Analysis Report
Docebo Inc. (DCBO) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
