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Earnings season is undoubtedly one of the most critical periods for stocks, with companies finally breaking the silence and revealing what’s transpired behind closed curtains.
Many companies have reported thus far, with just as many scheduled to do the same in the upcoming weeks.
This week, a well-known stock, Shopify (SHOP - Free Report) , is on deck to unveil its Q4 earnings on Wednesday, February 15th, after the market close.
Shopify provides a multi-tenant, cloud-based, multi-channel e-commerce platform for small and medium-sized businesses.
How does the company currently stack up? We can analyze results from Amazon (AMZN - Free Report) as a small gauge. Let’s take a closer look.
Amazon Q4
Amazon posted better-than-expected earnings results, exceeding the Zacks Consensus EPS Estimate by 40%.
Quarterly revenue totaled $149.2 billion, nearly 3% above our consensus estimate and growing roughly 8.5% year-over-year. Below is a chart illustrating AMZN’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
However, analyzing the company’s Third-Party Seller Service net sales can help us size up Shopify’s upcoming release.
Third-Party Seller Services net sales totaled $36.4 billion for the quarter, crushing our $31.8 billion consensus estimate by more than 14%. As we can see in the chart below, Amazon has consistently exceeded estimates within this metric.
Image Source: Zacks Investment Research
Now, onto Shopify.
Shopify
Quarterly Estimates –
Analysts have had mixed views regarding their earnings outlooks, with three upward and three downward earnings estimate revisions hitting the tape over the last 60 days.
Image Source: Zacks Investment Research
Still, Shopify’s top line is in better health, with our $1.6 billion consensus revenue estimate suggesting a positive change of nearly 20% year-over-year.
Quarterly Performance –
SHOP snapped a streak of negative bottom line surprises in its latest quarter, reporting earnings of -$0.02 and exceeding the Zacks Consensus EPS Estimate by more than 70%.
Revenue results paint a similar story; Shopify snapped a streak of revenue misses in its latest release, reporting sales 2.5% above expectations.
Image Source: Zacks Investment Research
Valuation –
It’s no secret that SHOP shares are pricey, typical of stocks with a high-growth nature. The company’s forward price-to-sales ratio currently sits at 9.3X, a fraction of the 22.7X five-year median but undoubtedly on the higher end of the spectrum.
Image Source: Zacks Investment Research
Further, the company’s TTM price-to-book presently sits at 7.1X, again below the 13.9X five-year median by a substantial margin.
Image Source: Zacks Investment Research
SHOP carries a Style Score of “D” for Value.
Putting Everything Together
We’re well into earnings season, with an extensive list of companies reporting quarterly results daily.
And in the coming weeks, we’ll receive just as many.
This week, we’ll receive results from Shopify on Wednesday, February 15th, after the market close.
We have already received quarterly results from a peer, Amazon (AMZN - Free Report) , with the company posting better-than-expected Third-Party Seller Services net sales.
Analysts have been mixed in their earnings outlook, with estimates indicating a pullback in earnings but an uptick in revenue year-over-year.
In addition, the company’s valuation multiples have fallen significantly following a rough 2022 but still remain on the higher end of the spectrum.
Heading into the release, Shopify (SHOP - Free Report) is a Zacks Rank #3 (Hold) with an Earnings ESP Score of 23.8%.
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Shopify Q4 Preview: Can Shares Maintain Strength?
Earnings season is undoubtedly one of the most critical periods for stocks, with companies finally breaking the silence and revealing what’s transpired behind closed curtains.
Many companies have reported thus far, with just as many scheduled to do the same in the upcoming weeks.
This week, a well-known stock, Shopify (SHOP - Free Report) , is on deck to unveil its Q4 earnings on Wednesday, February 15th, after the market close.
Shopify provides a multi-tenant, cloud-based, multi-channel e-commerce platform for small and medium-sized businesses.
How does the company currently stack up? We can analyze results from Amazon (AMZN - Free Report) as a small gauge. Let’s take a closer look.
Amazon Q4
Amazon posted better-than-expected earnings results, exceeding the Zacks Consensus EPS Estimate by 40%.
Quarterly revenue totaled $149.2 billion, nearly 3% above our consensus estimate and growing roughly 8.5% year-over-year. Below is a chart illustrating AMZN’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
However, analyzing the company’s Third-Party Seller Service net sales can help us size up Shopify’s upcoming release.
Third-Party Seller Services net sales totaled $36.4 billion for the quarter, crushing our $31.8 billion consensus estimate by more than 14%. As we can see in the chart below, Amazon has consistently exceeded estimates within this metric.
Image Source: Zacks Investment Research
Now, onto Shopify.
Shopify
Quarterly Estimates –
Analysts have had mixed views regarding their earnings outlooks, with three upward and three downward earnings estimate revisions hitting the tape over the last 60 days.
Image Source: Zacks Investment Research
Still, Shopify’s top line is in better health, with our $1.6 billion consensus revenue estimate suggesting a positive change of nearly 20% year-over-year.
Quarterly Performance –
SHOP snapped a streak of negative bottom line surprises in its latest quarter, reporting earnings of -$0.02 and exceeding the Zacks Consensus EPS Estimate by more than 70%.
Revenue results paint a similar story; Shopify snapped a streak of revenue misses in its latest release, reporting sales 2.5% above expectations.
Image Source: Zacks Investment Research
Valuation –
It’s no secret that SHOP shares are pricey, typical of stocks with a high-growth nature. The company’s forward price-to-sales ratio currently sits at 9.3X, a fraction of the 22.7X five-year median but undoubtedly on the higher end of the spectrum.
Image Source: Zacks Investment Research
Further, the company’s TTM price-to-book presently sits at 7.1X, again below the 13.9X five-year median by a substantial margin.
Image Source: Zacks Investment Research
SHOP carries a Style Score of “D” for Value.
Putting Everything Together
We’re well into earnings season, with an extensive list of companies reporting quarterly results daily.
And in the coming weeks, we’ll receive just as many.
This week, we’ll receive results from Shopify on Wednesday, February 15th, after the market close.
We have already received quarterly results from a peer, Amazon (AMZN - Free Report) , with the company posting better-than-expected Third-Party Seller Services net sales.
Analysts have been mixed in their earnings outlook, with estimates indicating a pullback in earnings but an uptick in revenue year-over-year.
In addition, the company’s valuation multiples have fallen significantly following a rough 2022 but still remain on the higher end of the spectrum.
Heading into the release, Shopify (SHOP - Free Report) is a Zacks Rank #3 (Hold) with an Earnings ESP Score of 23.8%.