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For the third quarter of 2023, Shopify expects revenue growth at a low-twenties percentage rate on a year-over-year basis. Adjusting for 300-400 basis points headwind related to the divestiture of the logistics business, revenues are expected to grow in the mid-twenties on a year-over-year basis.
The Zacks Consensus Estimate for revenues is currently pegged at $1.66 billion, suggesting growth of 21.7% from the year-ago quarter’s reported figure.
The consensus mark for earnings is pegged at 15 cents per share, up by a penny over the past 30 days. Shopify reported a loss of 2 cents per share in the year-ago quarter.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
Shopify’s third-quarter 2023 results are expected to reflect the adverse effects of a challenging macro environment and higher interest expenses. Moreover, cautious consumer spending is expected to have hurt top-line growth.
Nevertheless, Shopify’s investments in developing the best solutions for modern e-commerce are expected to have helped it expand its merchant base. Shopify’s Point-of-Sale (POS) Pro solution has been gaining traction among leading retailers and top-tier brands. These factors are expected to have driven top-line growth in the to-be-reported quarter.
In the last reported quarter, Monthly Recurring Revenues (MRR) were up 29.7% year over year, reaching $139 million as new merchants joined the platform and the number of retail locations using POS Pro increased.
Our model suggests an MRR of $125.6 million, indicating 17.4% growth from the figure reported in the year-ago quarter.
In second-quarter 2023, Shopify Plus revenues accounted for roughly 29% of MRR. Our model estimate for third-quarter Plus MRR is pegged at $43.5 million, suggesting 24% year-over-year growth.
Meanwhile, the continued adoption of Shopify products such as Shop Pay, Shop Pay Installments and Shopify Balance is likely to have driven the company’s top line. Solutions like Shopify Audiences, Shopify Collabs, POSGo, Tap to Pay, integrated Twitter Shopping and YouTube channels are expected to have strengthened its relationships with buyers.
These factors are expected to have aided Gross Merchandise Volume (GMV) growth in the to-be-reported quarter. Our model for GMV is pegged at $52.55 billion, indicating 13.9% growth from the figure reported in the year-ago quarter.
Moreover, our model suggests third-quarter Subscription solutions revenues to grow 9.5% year over year to $412.5 million. In second-quarter 2023, Subscription Solutions revenues climbed 9.5% year over year to $411.9 million.
Merchant Solutions revenues improved 34.6% year over year to $1.25 billion, driven by strong GMV in second-quarter 2023. Our model estimate for the third quarter is pegged at $1.19 billion, indicating 20.3% year-over-year growth.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Shopify has an Earnings ESP of -7.69% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Image: Shutterstock
Shopify (SHOP) to Report Q3 Earnings: What's in the Cards?
Shopify (SHOP - Free Report) is scheduled to report its third-quarter 2023 results on Nov 2.
For the third quarter of 2023, Shopify expects revenue growth at a low-twenties percentage rate on a year-over-year basis. Adjusting for 300-400 basis points headwind related to the divestiture of the logistics business, revenues are expected to grow in the mid-twenties on a year-over-year basis.
The Zacks Consensus Estimate for revenues is currently pegged at $1.66 billion, suggesting growth of 21.7% from the year-ago quarter’s reported figure.
The consensus mark for earnings is pegged at 15 cents per share, up by a penny over the past 30 days. Shopify reported a loss of 2 cents per share in the year-ago quarter.
Shopify Inc. Price and EPS Surprise
Shopify Inc. price-eps-surprise | Shopify Inc. Quote
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
Shopify’s third-quarter 2023 results are expected to reflect the adverse effects of a challenging macro environment and higher interest expenses. Moreover, cautious consumer spending is expected to have hurt top-line growth.
Nevertheless, Shopify’s investments in developing the best solutions for modern e-commerce are expected to have helped it expand its merchant base. Shopify’s Point-of-Sale (POS) Pro solution has been gaining traction among leading retailers and top-tier brands. These factors are expected to have driven top-line growth in the to-be-reported quarter.
In the last reported quarter, Monthly Recurring Revenues (MRR) were up 29.7% year over year, reaching $139 million as new merchants joined the platform and the number of retail locations using POS Pro increased.
Our model suggests an MRR of $125.6 million, indicating 17.4% growth from the figure reported in the year-ago quarter.
In second-quarter 2023, Shopify Plus revenues accounted for roughly 29% of MRR. Our model estimate for third-quarter Plus MRR is pegged at $43.5 million, suggesting 24% year-over-year growth.
Meanwhile, the continued adoption of Shopify products such as Shop Pay, Shop Pay Installments and Shopify Balance is likely to have driven the company’s top line. Solutions like Shopify Audiences, Shopify Collabs, POSGo, Tap to Pay, integrated Twitter Shopping and YouTube channels are expected to have strengthened its relationships with buyers.
These factors are expected to have aided Gross Merchandise Volume (GMV) growth in the to-be-reported quarter. Our model for GMV is pegged at $52.55 billion, indicating 13.9% growth from the figure reported in the year-ago quarter.
Moreover, our model suggests third-quarter Subscription solutions revenues to grow 9.5% year over year to $412.5 million. In second-quarter 2023, Subscription Solutions revenues climbed 9.5% year over year to $411.9 million.
Merchant Solutions revenues improved 34.6% year over year to $1.25 billion, driven by strong GMV in second-quarter 2023. Our model estimate for the third quarter is pegged at $1.19 billion, indicating 20.3% year-over-year growth.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Shopify has an Earnings ESP of -7.69% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Itron (ITRI - Free Report) has an Earnings ESP of +7.61% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Itron shares have gained 12.2% in the year-to-date period. ITRI is set to report its third-quarter 2023 results on Nov 2.
GoDaddy (GDDY - Free Report) has an Earnings ESP of +8.11% and a Zacks Rank of 1 at present.
GoDaddy shares have declined 3.3% in the year-to-date period. GDDY is set to report its third-quarter 2023 results on Nov 2.
Paylocity Holding (PCTY - Free Report) has an Earnings ESP of +11.32% and a Zacks Rank #1.
Paylocity shares have declined 9.2% year to date. PCTY is set to report its first-quarter fiscal 2024 results on Nov 2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.