Shopify is expected to report strong revenue growth in Q2, with positive long-term prospects

From Nasdaq: 2024-08-05 12:10:00

Shopify is set to report its Q2 2024 results on Aug 7, with revenue growth expected in the high teens on a year-over-year basis. The Zacks Consensus Estimate for revenues is $2 billion and earnings are projected at 20 cents per share. SHOP stock has underperformed the sector and S&P 500.

Shopify has been benefiting from a strong merchant base and merchant-friendly tools like Shop Pay and Shopify Capital. The company’s platform is widely used by small and medium businesses struggling with inflation. Integration of AI through Shopify Magic and offerings like Shop Pay are helping merchants expand their footprint.

In Q1 2024, Shop Pay processed $14 billion in GMV, accounting for 39% of SHOP’s GPV. GMV is expected to grow 20% YoY in Q2. The consensus mark for Subscription solutions revenues is $506 million, implying 20.3% YoY growth, while Merchant Solutions is estimated to grow 17.6% YoY.

Despite SHOP shares underperforming the sector and S&P 500, Shopify’s long-term prospects remain strong with its expanding partner base and international footprint. The company’s strategy of divesting the logistics business and partnerships with Amazon and Target are noteworthy developments.

While SHOP stock is trading at a premium, Shopify’s growing merchant base, expanding partner base, and focus on core business are driving long-term growth prospects. Shopify currently carries a Zacks Rank #2 (Buy) and a Growth Score of A, offering a strong investment opportunity.



Read more at Nasdaq: Is Shopify (SHOP) Stock a Smart Buy Before Q2 Earnings Report?