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
-
Stock Market Today: Dow Rises 854 Points From Its Intraday LowIf there's one thing markets hate, it's uncertainty. But uncertainty is all they're getting these days.
-
Are You a Retirement Millionaire Too Scared To Spend?If you are too scared to spend money in retirement, you may be saddled with regret. Here are three ways to safely enjoy your sizable retirement nest egg.
-
Stock Market Today: Dow Rises 854 Points From Its Intraday LowIf there's one thing markets hate, it's uncertainty. But uncertainty is all they're getting these days.
-
Seven Questions to Ask When Evaluating Personal Loan OptionsTaking out a personal loan too hastily could lock you into unfavorable terms with an untrustworthy lender. Ask these questions before signing anything.
-
How Much Does Being Rich Matter in Retirement?After a certain point, having more money in retirement won't make you any happier, new research shows. Instead, physical health, a sense of purpose, and a minimal amount of non-mortgage debt are more relevant.
-
The Three Biggest Fears Keeping Retirees Up at NightHere are the steps you can take to put those fears to rest and retire with confidence so you can relax and enjoy the life you've planned.
-
What Can a Donor-Advised Fund Do for You? (A Lot)DAFs and private foundations go about helping charities (and those who donate) in different ways. Each comes with its own benefits and restrictions to navigate.
-
Estate Planning When You Have International AssetsEstate planning gets tricky when you have assets and/or beneficiaries outside the U.S. To avoid costly inheritance mistakes, it pays to understand the basics.
-
Microsoft Stock: Innovation Spurs Its 100,000% ReturnMicrosoft's ability to recognize the "next big thing" has allowed sales – and its share price – to grow exponentially over the years.
-
Three Essential Estate Planning Steps to Protect Your Nest EggAfter dedicating years to building your wealth and securing your future, make sure your assets are protected and your loved ones are provided for in the future.
