Shopify beats earnings estimates in Q3, shares surge 21.04%, driving growth with strong results

From Nasdaq: 2024-11-13 10:32:00

In the third quarter of 2024, Shopify (SHOP) reported earnings of 36 cents per share, beating estimates by 33.33%, with revenues of $2.16 billion, up 26.1% YoY. SHOP shares surged 21.04% after the results, up 39.8% YTD, outperforming the Computer and Technology sector. Shopify’s earnings have consistently beaten estimates in the last four quarters.

SHOP continued to strengthen partnerships, becoming Roblox’s (RBLX) first commerce integration partner and expanding ties with YouTube and PayPal (PYPL). SHOP’s merchant base growth is fueled by innovative offerings like Shop Pay and Shopify Capital, driving revenues and subscriptions higher in Q3. Gross Merchandise Volume (GMV) reached $69.7 billion, up 24% YoY.

Operating expenses in Q3 rose to $835 million, with sales & marketing, research & development, and general & administrative expenses all seeing increases compared to the prior year. However, SHOP’s operating income grew to $283 million, a significant improvement over the previous year. Cash and cash equivalents were at $4.9 billion as of Sept. 30, 2024.

For Q4 2024, Shopify expects revenues to grow at a mid-to-high twenties percentage rate YoY, with operating expenses as a percentage of revenues projected at 32% – 33%. Analysts estimate fourth-quarter revenues at $2.62 billion, up 22.17% YoY. Full-year 2024 revenues are expected to reach $8.63 billion, with earnings forecasted at $1.12 per share.

Despite strong performance, SHOP’s Value Score suggests a premium valuation compared to the sub-industry. The stock is trading at a forward 12-month Price/Sales of 13.92X, reflecting its growth potential and market confidence. Shopify’s focus on expanding its merchant base and global footprint positions it for continued success and growth in the e-commerce sector.



Read more at Nasdaq: Shopify Shares Rise on Q3 Earnings Beat: Is the Stock a Buy?