Shopify (SHOP) stock jumped out of the gate Tuesday after the e-commerce technology company beat top- and bottom-line expectations for its third quarter and provided a strong outlook for its fourth quarter.
In the three months ended September 30, Shopify's revenue increased 26.1% year over year to $2.2 billion, boosted by a 24% surge in gross merchandise volume (GMV) to $69.7 billion. Its net income nearly doubled from the year-ago period to $344 million.
"Q3 was outstanding, further establishing Shopify as a leader in powering commerce anywhere, anytime," said Shopify President Harley Finkelstein in a statement. "Our unified commerce platform is becoming the go-to choice for merchants of all sizes."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results topped analysts' expectations. Wall Street was anticipating revenue of $2.1 billion and net income of $332 million, according to Investor's Business Daily.
For the fourth quarter, Shopify said it expects to achieve revenue growth at a mid-to-high-twenties percentage rate from the prior year, which is well ahead of the 23% year-over-year growth rate analysts are anticipating.
"As the busiest shopping season of the year for our merchants approaches, they trust Shopify to provide the tools, unmatched speed, and reliability to maximize their success," Finkelstein said.
Is Shopify stock a buy, sell or hold?
Shopify has outperformed the broad market in 2024, up nearly 43% for the year to date vs the S&P 500's roughly 26% gain. And Wall Street remains bullish on the tech stock.
According to S&P Global Market Intelligence, the consensus recommendation among the 52 covering analysts it tracks is a Buy.
However, analysts' price targets have struggled to keep up with the large-cap stock's surge in 2024. Indeed, the average price target of $82.58 represents a steep discount to current levels. However, analysts may very well raise their price targets on SHOP following the company' strong earnings results.
Financial services firm Oppenheimer has an Outperform rating (equivalent to a Buy) on Shopify stock.
"Shopify has established itself as a fast-growing, pure play software-as-a-service (SaaS) Commerce application vendor that is taking share of retailer technology spend," said Oppenheimer analyst Ken Wong in an August 7 note. "We think Shopify is well led by a visionary and respected management team and are confident in its multi-year growth potential. Shopify is a generational technology disruptor in a large and underpenetrated Digital Commerce opportunity."
Related Content
-
Retire Abroad Before 55: Eight Expert TipsCan't afford early retirement in the U.S.? You really can retire abroad before 55 if you plan carefully. The strong dollar helps, but consider your long-term strategy.
-
The Rule of $1,000: Is This Retirement Rule Right for You?The rule of $1,000 a month can estimate how much you need to save for retirement. But it assumes an aggressive withdrawal rate.
-
25 Financial Moves to Consider Before December 31Tidying up your financial house before the New Year kicks off will put you in a great position to have a financially satisfying and successful 2025.
-
Five Side Hustles You Could Turn Into a Full-Time BusinessYou might be able to capitalize on your expertise in ways you haven't thought of, possibly even leading to quitting your 9-to-5 job to do what you love.
-
Stock Market Today: Nasdaq Nabs New High After Jobs DataThe S&P 500 also closed at its highest level ever, while the Dow Jones Industrial Average was pressured by another down day for UnitedHealth stock.
-
Rebound in Jobs Growth Keeps Fed on Track: What the Experts Are SayingJobs Report No nasty surprises in the November payrolls data leaves a quarter-point cut in play.
-
Why Hewlett Packard Stock Is Still a Buy After EarningsHewlett Packard stock is sizzling Friday after the tech giant beat expectations for its fiscal fourth quarter. Here's what Wall Street is saying.
-
Ulta Beauty Stock Gets a Much-Needed Boost After EarningsBeaten-down Ulta Beauty stock is notably higher Friday after the cosmetics retailer's strong earnings report and encouraging outlook.
-
Lululemon Jumps to the Top of the S&P 500 After Earnings. Here's WhyLululemon stock is soaring Friday after the athletic apparel retailer's beat-and-raise quarter.
-
Which of These Three Types of Soon-to-Be Retirees Are You?Some folks are concerned. Others are lacking clarity. But what you really want to be is confident. So, how do you stack up?
