Shopify (SHOP) stock opened higher Tuesday after the e-commerce technology company reported a top-line beat and in-line earnings for its fourth quarter. However, shares were last seen in negative territory as Wall Street weighs SHOP's revenue forecast.
In the three months ending December 31, Shopify's revenue increased 31.2% year over year to $2.8 billion. Its earnings per share (EPS) rose 26.5% from the year-ago period to 43 cents.
"We are thrilled with our strong performance in Q4, wrapping up an outstanding 2024. Q4 marks our seventh consecutive quarter of 25% or greater revenue growth when excluding logistics," said Shopify Chief Financial Officer Jeff Hoffmeister in a statement. "These consistent results are a testament to our strategic initiatives and operational discipline, positioning us well for continued success and growth in the future."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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 beat analysts' expectations. Wall Street was anticipating revenue of $2.7 billion and earnings of 43 cents per share, according to Investor's Business Daily.
Shopify also said gross merchandise volume (GMV) increased 25.7% year over year to $94.5 billion, topping the $93 billion in GMV analysts were calling for.
For the first quarter, Shopify said it expects revenue to be up in the mid-twenties percentage rate compared to the year-ago period. While this is in line with the 25% growth rate Wall Street is expecting, it is slower than what was seen in Q4, which could be the cause of today's price struggles.
"Heading into 2025, we are committed to making entrepreneurship more common and further establishing Shopify as the go-to commerce platform for businesses of all sizes," said Shopify President Harley Finkelstein in a statement.
Is Shopify stock a buy, sell or hold?
Shopify has done well on the price charts over the long term. Indeed, SHOP is up 32% in the past 12 months vs the S&P 500's total return (price change plus dividends) of 22%. And Wall Street is bullish on the tech stock. According to S&P Global Market Intelligence, the consensus recommendation among analysts it tracks is a Buy.
However, analysts' price targets have struggled to keep up with large-cap stock's run higher. Currently, the average price target of $122.83 is right around where the stock trades today.
Financial services firm Oppenheimer is one of those firms with an Outperform rating (equivalent to a Buy) on SHOP stock, along with a $130 price target.
"Shopify has established itself as a fast-growing, pure-play SaaS [software as a service] commerce application vendor that is taking share of retailer technology spend," wrote Oppenheimer analyst Ken Wong in a November 12 note. "We think Shopify is well-led by a visionary and respected management team and are confident in its multi-year growth potential."
Wong adds that SHOP "is a generational technology disruptor in a large and underpenetrated digital commerce opportunity."
Related Content
-
Holidays Are a Rich Time to Talk Money With Young Adults: A Financial Adviser's Guide for ParentsThe most productive family financial conversations start with open-ended questions and a lot of listening. Don't let this opportunity pass you by.
-
How Women of Wealth Are Creating a New Model of Giving Through Family OfficesWomen who are inheriting wealth today are shifting from traditional philanthropy to creating sustainable systems to fund philanthropic gifts into perpetuity.
-
I'm a Financial Planner: This Retirement GPS Helps With Navigating Your Drawdown PhaseReady to retire? Here's how to swap your 'peak earnings' mindset for a 'preserve-plus-grow' approach instead of relying on the old, risky 4% rule.
-
Donating Stock Instead of Cash Is the 2-for-1 Deal You'll Love at Tax TimeGiving appreciated stock or using a donor-advised fund (DAF) this year would be smarter than writing a check to support your favorite causes. Here's why.
-
Traveling With Purpose: What Zambia and Zimbabwe Taught Us About Slowing DownDon't treat retirement trips like they're an exercise in ticking off boxes. Slowing down and letting adventure unfold can create more meaningful memories.
-
Investment Expert: Is Your Retirement Portfolio Too Late to the Profit Party?If you're following the usual retirement investment model, you could be missing out on a potential profit period that companies see in the run-up to their IPOs.
-
Losing Your Job? A Financial Planner's 6 Steps to Survive and ThriveWhether pink slips are just rumors at your company or layoffs have already landed, there are things you can do today to make the best of a tough situation.
-
Oil Prices vs Investor Returns: It's What's Beneath the Surface That CountsEngineering, geology and operating discipline can determine the success of oil and gas projects as much as the cost per barrel.
