Shopify Inc (SHOP)

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Shopify (SHOP) to Report Q4 Earnings: What's in the Cards?

https://www.zacks.com/stock/news/2223491/shopify-shop-to-report-q4-earnings-whats-in-the-cards
Zacks Equity Research February 08, 2024

Shopify (SHOP ) is scheduled to report its fourth-quarter 2023 results on Feb 13.

For the to-be-reported quarter, Shopify expects revenue growth in the high teens on a year-over-year basis. Adjusting for a 400-500 bps headwind related to the divestiture of the logistics business, revenues are expected to grow in the low-to-mid-twenties on a year-over-year basis.

The Zacks Consensus Estimate for revenues is currently pegged at $2.07 billion, suggesting growth of 19.21% from the year-ago quarter’s reported figure.

The consensus mark for earnings is pegged at 31 cents per share, unchanged over the past 30 days. Shopify reported earnings of 7 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 fourth-quarter 2023 results are expected to have benefited from investments in developing the best solutions for modern e-commerce. These are expected to have helped it expand its merchant base.

Integration of AI through Shopify Magic across products and workflows is helping merchants expand their footprint. Shopify Checkout is helping merchants offer secure and seamless checkout options for customers.

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.

In the last reported quarter, Shop Pay facilitated $12 billion in GMV, an increase of 50% year-over-year. Cross-border GMV was approximately 15% of total GMV in the reported quarter, reflecting the growing adoption of Shopify Pay globally.

These factors are expected to have aided Gross Merchandise Volume (GMV) growth in the to-be-reported quarter. The Zacks Consensus Estimate for GMV is pegged at $71 billion, indicating 16.4% year-over-year growth.

Moreover, the consensus mark for fourth-quarter Subscription solutions revenues is pegged at $407 million. The Zacks Consensus Estimate for Merchant Solutions is pegged at $625 million.

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. That’s the exact case here.

Shopify has an Earnings ESP of +1.02% and a Zacks Rank #1.