Shopify Stock Rally Extinguished by Weak Revenue Outlook for 2023

Ecommerce firm Shopify (SHOP) reported fourth-quarter earnings and revenue that exceeded analyst estimates. But Shopify’s shares retreated as the company’s revenue outlook fell short of expectations in March.


The company reported December quarterly earnings after the market closed on Wednesday.

In its fourth quarter ended Dec. 31, Canada-based Shopify said it earned 7 cents per share on an adjusted basis, down 50% from a year earlier. Sales for Shopify stock rose 26% to $1.7 billion, the company said.

Analysts expected Shopify’s earnings report to record a 1 cent loss on $1.65 billion in revenue. A year earlier, Shopify earned 14 cents per share on revenue of $1.38 billion.

Shopify shares fell 9.7% to 48.21 in early trading in the stock market today. During Wednesday’s regular session, shares were up 6.5%.

Shopify Stock: Revenue Growth ‘High Teens’

For the first quarter of 2023, the company forecast revenue growth of “high teens”. Analysts had expected revenue growth of more than 20%.

“We believe the earnings guide implies that gross trading volume in the first quarter will be weaker than expected,” Jefferies analyst Samad Samana said in a report. “Management noted that the uncertain macro (economics) had been factored into the outlook.”

At RBC Capital, analyst Paul Treiber said in a report: “Policy implies a return to negative earnings per share (we estimate a loss of 5 cents), falling short of the consensus at zero cents in earnings.” that there is little insight into the sustainability of consumer spending in the short term.”

Shopify sets up ecommerce websites for small businesses and partners with others to handle digital payments and shipping.

After a plunge in 2022, Shopify’s stock was up 44% this year.

Shopify raised contract prices for merchants in January.

The company is building a US distribution network to store and ship products for its trade customers.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.


How to use the 10-week moving average for buying and selling

Get Free IBD Newsletters: Market Prep | Technical Report | How to invest

IBD Live: a new tool for daily stock market analysis

Do you want to make a quick profit and avoid big losses? Try Swing Trader






Leave a Reply

Your email address will not be published. Required fields are marked *