Shopify Earnings: What To Look For From SHOP

E-commerce platform Shopify (NYSE:SHOP) will be reporting earnings this Tuesday before market hours. Here’s what to look for.

Shopify beat analysts’ revenue expectations by 5.2% last quarter, reporting revenues of $2.68 billion, up 31.1% year on year. It was a stunning quarter for the company, with an impressive beat of analysts’ gross merchandise volume estimates and a solid beat of analysts’ EBITDA estimates.

Is Shopify a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Shopify’s revenue to grow 27.5% year on year to $2.76 billion, improving from the 26.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.34 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Shopify has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 2.5% on average.

Looking at Shopify’s peers in the sales and marketing software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. GoDaddy delivered year-on-year revenue growth of 10.3%, beating analysts’ expectations by 2.7%, and VeriSign reported revenues up 7.3%, topping estimates by 0.5%. GoDaddy traded up 5.1% following the results while VeriSign was down 1.3%.

Read our full analysis of GoDaddy’s results here and VeriSign’s results here.

Investors in the sales and marketing software segment have had fairly steady hands going into earnings, with share prices down 1% on average over the last month. Shopify is up 5.8% during the same time and is heading into earnings with an average analyst price target of $165.87 (compared to the current share price of $173.99).

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