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Factors Setting the Tone For Shopify's (SHOP) Q4 Earnings
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Shopify (SHOP - Free Report) has been benefiting from the e-commerce-induced growth in the merchant base. A robust uptick in Shopify Shipping, Shopify Payments and Shopify Capital is expected to have favored the top line in fourth-quarter 2021. The company is slated to report fourth-quarter results on Feb 16.
The company has been focused on expanding global commerce on a regular basis, as international buyers account for more than 28% of traffic to merchant stores following the launch of Shopify Markets. Notably, Shopify Markets helps merchants seamlessly sell products to customers globally from a single store. Solid adoption of new merchant-friendly applications bodes well.
Partnerships with Meta Platforms and Spotify Technology (SPOT - Free Report) are likely to have expanded Shopify’s merchant base.
The number of buyers checking out with Shop Pay, Facebook and Instagram has been increasing, which is anticipated to have favored Shopify’s fourth-quarter performance.
Artists have been connecting their Spotify artist pages with Shopify storefronts to sell merchandise. Shopify is expected to have benefited from adding Shopify Payments as the payment processor for all Shopify and non-Shopify merchants in the fourth quarter.
The Zacks Consensus Estimate for fourth-quarter Gross Merchandise Volume is pegged at $43.51 billion, indicating year-over-year growth of 40.7%.
Click here to know how Shopify’s overall fourth-quarter results are likely to be.
The massive growth in e-commerce spending is expected to have driven Shopify’s fourth-quarter performance. The company’s cloud-based platform has been able to cater to the growing needs of merchants at a time when social media, mobile devices and data analytics are transforming the e-commerce marketplace.
The Zacks Consensus Estimate for Merchant Solutions revenues stands at $983 million, indicating 40.8% growth from the year-ago quarter.
Shopify has a rich partner ecosystem, which might have acted as a growth driver in the quarter to be reported. Shopify has been banking on its new ERP program with ERP heavyweights such as Microsoft (MSFT - Free Report) .
Shopify has partnered with Microsoft to integrate their ERP program into the Shopify app store to enable merchants to seamlessly connect their workflows. These features are expected to have bolstered customer engagement in the fourth quarter.
However, supply chain delays and increased costs for materials, labor, shipping or advertising may have weighed on the fourth-quarter performance.
Higher investments in product development and fulfillment platform are likely to have limited margin expansion in the near term.
The Zacks Consensus Estimate for the Monthly Recurring Revenue (MRR) stands at $106 million, indicating growth of 27.7% from the year-ago quarter.
The consensus mark for Subscription Solutions revenues is pegged at $360 million, suggesting 29% growth from the year-ago quarter.
Image: Bigstock
Factors Setting the Tone For Shopify's (SHOP) Q4 Earnings
Shopify (SHOP - Free Report) has been benefiting from the e-commerce-induced growth in the merchant base. A robust uptick in Shopify Shipping, Shopify Payments and Shopify Capital is expected to have favored the top line in fourth-quarter 2021. The company is slated to report fourth-quarter results on Feb 16.
The company has been focused on expanding global commerce on a regular basis, as international buyers account for more than 28% of traffic to merchant stores following the launch of Shopify Markets. Notably, Shopify Markets helps merchants seamlessly sell products to customers globally from a single store. Solid adoption of new merchant-friendly applications bodes well.
Partnerships with Meta Platforms and Spotify Technology (SPOT - Free Report) are likely to have expanded Shopify’s merchant base.
The number of buyers checking out with Shop Pay, Facebook and Instagram has been increasing, which is anticipated to have favored Shopify’s fourth-quarter performance.
Artists have been connecting their Spotify artist pages with Shopify storefronts to sell merchandise. Shopify is expected to have benefited from adding Shopify Payments as the payment processor for all Shopify and non-Shopify merchants in the fourth quarter.
The Zacks Consensus Estimate for fourth-quarter Gross Merchandise Volume is pegged at $43.51 billion, indicating year-over-year growth of 40.7%.
Click here to know how Shopify’s overall fourth-quarter results are likely to be.
Shopify Inc. Revenue (TTM)
Shopify Inc. revenue-ttm | Shopify Inc. Quote
E-Commerce Spending to Aid Shopify’s Q4 Results
The massive growth in e-commerce spending is expected to have driven Shopify’s fourth-quarter performance. The company’s cloud-based platform has been able to cater to the growing needs of merchants at a time when social media, mobile devices and data analytics are transforming the e-commerce marketplace.
The Zacks Consensus Estimate for Merchant Solutions revenues stands at $983 million, indicating 40.8% growth from the year-ago quarter.
Shopify has a rich partner ecosystem, which might have acted as a growth driver in the quarter to be reported. Shopify has been banking on its new ERP program with ERP heavyweights such as Microsoft (MSFT - Free Report) .
Shopify has partnered with Microsoft to integrate their ERP program into the Shopify app store to enable merchants to seamlessly connect their workflows. These features are expected to have bolstered customer engagement in the fourth quarter.
However, supply chain delays and increased costs for materials, labor, shipping or advertising may have weighed on the fourth-quarter performance.
Higher investments in product development and fulfillment platform are likely to have limited margin expansion in the near term.
The Zacks Consensus Estimate for the Monthly Recurring Revenue (MRR) stands at $106 million, indicating growth of 27.7% from the year-ago quarter.
The consensus mark for Subscription Solutions revenues is pegged at $360 million, suggesting 29% growth from the year-ago quarter.
Shopify currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.