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
-
Here's How To Get Organized And Work For YourselfWhether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
-
How to Manage Risk With Diversification"Don't put all your eggs in one basket" means different things to different investors. Here's how to manage your risk with portfolio diversification.
-
What You Need to Know About Working For Yourself
Whether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
-
How to Manage Portfolio Risk With Diversification
"Don't put all your eggs in one basket" means different things to different investors. Here's how to manage your risk with portfolio diversification.
-
How Much Money Is Enough to Be Happy? Can You Have Too Much?The relationship between money and happiness is complicated, but the experts agree on these three eye-opening fundamentals.
-
Stock Market Today: Muted Inflation Data Sparks Relief RallyEncouraging news about the path of consumer prices sent risk assets soaring again.
-
What Can Accredited Investors Do?As an accredited investor, you will have access to a more diverse pool of investment options. Here's what you need to know.
-
Five Year-End Strategies You Can't Afford to MissInstead of making New Year's resolutions, consider making some money moves that could help save you big bucks on your taxes.
-
Buying an Insurance Policy: Three Ways to Do ItYou can buy an insurance policy through an insurance agent or broker or on the internet. Which way works best for you?
-
Stock Market Today: The Dow Adds 15 Points To End Its Losing StreakEquity indexes opened higher but drifted lower as markets priced in new Fed forecasts.
