Shopify earnings should get a boost from a strong holiday season for e-commerce sales when it reports fourth-quarter earnings early Tuesday, analysts say. Already on a strong run, Shopify stock should benefit from a near-50% gain in revenue.
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The e-commerce platform provider is expected to report revenue soared by 47% during the period to $327.6 million. Profit growth is seeing jumping 33% to 20 cents a share.
Shopify stock slipped by 1.6% to close at 173.17 on the stock market today. Shares in Shopify (SHOP) have gained 29% in 2019. Shopify stock has climbed into a buy zone, moving above an entry point of 176.70.
Furthermore, the company also is on the IBD Leaderboard watch list.
“We expect upside to consensus merchant solutions revenue of $198 million primarily from better than expected gross merchandise volume,” Credit Suisse analyst Brad Zelnick said in a report to clients.
Canada-based Shopify sets up e-commerce websites for small businesses. In addition, it partners with others to handle digital payments and shipping. The company also offers customer relationship management software so businesses can do targeted marketing for their clients.
Shopify Plus A Higher Fee Platform
The stock has a strong Relative Strength Rating of 96 out of a best-possible 99. The relative strength line tracks a stock’s performance vs. the S&P 500 index. A rising line points to outperformance.
Shares in Shopify have clawed back from a mid-December sell-off. The company announced its second equity capital offering within 12 months to raise cash.
Monthly fees for using the Shopify platform range from $29 for small e-commerce entrepreneurs using the basic package. In addition, the company charges $2,000 or more for Shopify Plus customers.
“The introduction of a platform fee for Shopify Plus customers in 2018 resulted in GMV impacting subscription revenue,” Jefferies analyst Samad Samana said in his note to clients. “Given our outlook for GMV and Q4 being the seasonally strongest for merchants, we believe platform fees are likely to be an upside contributor to subscription revenue.”
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