We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Growing Merchant Base Aid Shopify's (SHOP) Q1 Earnings?
Read MoreHide Full Article
Shopify Inc. (SHOP - Free Report) is scheduled to report first-quarter 2019 results on Apr 30.
Notably, the company has surpassed the Zacks Consensus Estimate for earnings in the trailing four quarters, with an average positive surprise of 150.95%.
In the last reported quarter, Shopify’s earnings and revenues improved on a year-over-year basis and surpassed the corresponding Zacks Consensus Estimate.
What to Expect in Q1
For first-quarter 2019, Shopify projects revenues in the range of $305 million to $310 million. The Zacks Consensus Estimate for revenues is currently pegged at $309.93 million, in line with the higher end of the guided range, representing a surge of almost 44.6% from the year-ago quarter.
Further, the Zacks Consensus Estimate for the bottom line is pegged at a loss of 5 cents, against the year-ago reported earnings of 4 cents.
Let’s see how things are shaping up prior to this announcement.
Favorable ESP
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Shopify has a Zacks Rank #2 and an Earnings ESP of +7.14%, which raises confidence about a possible earnings surprise.
Shopify is leaving no stone unturned to meet the requirements of a dynamic retail environment by introducing merchant-friendly applications. Consequently, this is bolstering merchant base, which is expected to drive top-line growth in the to-be-reported quarter.
Growing influence of Shopify’s easy-to-use upgrades and expanding merchant base are likely to boost Gross Merchandise Volume (GMV), thereby aiding the company to perform impressively in the first quarter.
We expect the momentum witnessed by Shopify Plus, Shopify Payments, Shopify Capital and Shopify Shipping to continue in the to-be-reported quarter as well. Further, the growing clout of Shopify Ping is anticipated to be a tailwind in the quarter under review.
Increasing initiatives to enhance footing in the international market deserves a special mention. For instance, the synergies from TicTail buyout and extending local language capabilities on its platform beyond English are expected to aid performance in the first quarter.
Additionally, Shopify has been developing various apps, including varied augmented reality (AR) and virtual reality (VR) based applications, in order to streamline customer experience, which is a positive.We believe that the company will reap benefits from incremental adoption of Dynamic Checkout, Centralized Marketing Dashboard, Fraud Protect and Shopify AR solutions, in the to-be-reported quarter.
Moreover, the availability of Apple Pay, Google Pay and the addition of Canada Post as sales channels are expected to have a significant impact on its top line in the first quarter. Meanwhile, a plethora of sales channels optionsincluding Google Pay, Facebook Messenger, Instagram, Pinterest, eBay and Amazon (AMZN - Free Report) continue to attract new merchants.
However, increasing investments on product development, infrastructure and platform are likely to limit margin expansion in the near term. Introduction of Instagram Checkout and stiff competition from Square (SQ - Free Report) are likely to impact the first-quarter results negatively.
Another Stock to Consider
Here is a stock which you may consider as our model shows that it also has the right combination of elements to post an earnings beat in their upcoming release:
Acacia Communications, Inc. has an Earnings ESP of +5.73% and a Zacks Rank #2. The company is set to report first-quarter 2019 earnings on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
Image: Bigstock
Can Growing Merchant Base Aid Shopify's (SHOP) Q1 Earnings?
Shopify Inc. (SHOP - Free Report) is scheduled to report first-quarter 2019 results on Apr 30.
Notably, the company has surpassed the Zacks Consensus Estimate for earnings in the trailing four quarters, with an average positive surprise of 150.95%.
In the last reported quarter, Shopify’s earnings and revenues improved on a year-over-year basis and surpassed the corresponding Zacks Consensus Estimate.
What to Expect in Q1
For first-quarter 2019, Shopify projects revenues in the range of $305 million to $310 million. The Zacks Consensus Estimate for revenues is currently pegged at $309.93 million, in line with the higher end of the guided range, representing a surge of almost 44.6% from the year-ago quarter.
Further, the Zacks Consensus Estimate for the bottom line is pegged at a loss of 5 cents, against the year-ago reported earnings of 4 cents.
Let’s see how things are shaping up prior to this announcement.
Favorable ESP
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Shopify has a Zacks Rank #2 and an Earnings ESP of +7.14%, which raises confidence about a possible earnings surprise.
Shopify Inc. Price and EPS Surprise
Shopify Inc. Price and EPS Surprise | Shopify Inc. Quote
Factors Likely to Influence Q1 Results
Shopify is leaving no stone unturned to meet the requirements of a dynamic retail environment by introducing merchant-friendly applications. Consequently, this is bolstering merchant base, which is expected to drive top-line growth in the to-be-reported quarter.
Growing influence of Shopify’s easy-to-use upgrades and expanding merchant base are likely to boost Gross Merchandise Volume (GMV), thereby aiding the company to perform impressively in the first quarter.
We expect the momentum witnessed by Shopify Plus, Shopify Payments, Shopify Capital and Shopify Shipping to continue in the to-be-reported quarter as well. Further, the growing clout of Shopify Ping is anticipated to be a tailwind in the quarter under review.
Increasing initiatives to enhance footing in the international market deserves a special mention. For instance, the synergies from TicTail buyout and extending local language capabilities on its platform beyond English are expected to aid performance in the first quarter.
Additionally, Shopify has been developing various apps, including varied augmented reality (AR) and virtual reality (VR) based applications, in order to streamline customer experience, which is a positive.We believe that the company will reap benefits from incremental adoption of Dynamic Checkout, Centralized Marketing Dashboard, Fraud Protect and Shopify AR solutions, in the to-be-reported quarter.
Moreover, the availability of Apple Pay, Google Pay and the addition of Canada Post as sales channels are expected to have a significant impact on its top line in the first quarter. Meanwhile, a plethora of sales channels optionsincluding Google Pay, Facebook Messenger, Instagram, Pinterest, eBay and Amazon (AMZN - Free Report) continue to attract new merchants.
However, increasing investments on product development, infrastructure and platform are likely to limit margin expansion in the near term. Introduction of Instagram Checkout and stiff competition from Square (SQ - Free Report) are likely to impact the first-quarter results negatively.
Another Stock to Consider
Here is a stock which you may consider as our model shows that it also has the right combination of elements to post an earnings beat in their upcoming release:
Acacia Communications, Inc. has an Earnings ESP of +5.73% and a Zacks Rank #2. The company is set to report first-quarter 2019 earnings on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>