Shopify hits a new 52-week high after a broadly upbeat quarterly earnings report

on Feb 13, 2020
Updated: Mar 11, 2020
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  • Shopify hits a new 52-week high after a broadly upbeat quarterly earnings report.
  • Shopify posts $505.2 million in revenue in Q4 versus the analysts' estimate of $482.1 million.
  • Shopify makes 43 cents of earnings per share in Q4 versus the analysts' estimate of 24 cents.

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The
Canadian multinational e-commerce company, Shopify, announced its performance
results for the fourth quarter on Wednesday. Beating analysts estimates for earnings
and revenue and giving upbeat guidance for fiscal 2020, the stock was seen
trading 7.8% higher later in the day. Hitting $593.89 per share, Shopify marked
a new high (52-week) on Wednesday.

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According
to Refinitiv, analysts were expecting the e-commerce giant to note $482.1
million in revenue in the fourth quarter. On the earnings front, they had
anticipated the company to make 24 cents of earnings per share. In its quarterly
results on Wednesday, the company recorded a significantly higher $505.2
million in revenue while the EPS was posted sharply better than expected at 43
cents per share in the recent quarter. The company also highlighted a 47%
growth in its quarterly revenue on YoY (year over year) basis.

Shopify’s
Guidance For Fiscal 2020

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In
its guidance for fiscal 2020, Shopify said that it now expects to generate
$2.13 to $2.16 billion in revenue. Experts forecast a lower $2.11 billion for
the e-commerce company this year. In the fourth quarter, Shopify cited holiday
sales to have contributed the most to its upbeat performance. Global sales were
registered at more than $2.9 billion during the period that marked a massive
61% increase in worldwide sales as compared to the same quarter last year.

Shopify
is celebrating in the stock market since the start of the new year. The stock
has gained 34% year to date
as compared to the benchmark S&P 500 that
is hanging low at only 4% this year so far.

CEO
Tobi Lutke commented on the earnings report and highlighted that the platform
now has over 1 million merchants. With $1 billion investment sidelined to
establish fulfillment centers across the United States, the company is
committed to bringing more merchants to its e-commerce platform and pose a
greater challenge to the staunch
rivals like eBay and Amazon
. With fulfillment centers in the U.S, experts
forecast the company to rise as a major threat to Amazon’s domestic business as
Shopify will be able to deliver packages within two days or maybe even less.

Mark
Mahaney Brands Shopify As The Second Largest E-commerce Retailer In The U.S

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Following
the earnings report, Mark Mahaney of RBC Capital Markets retained his bull
signal on Shopify’s stock. With an upgraded target of $650 for the price from
$400, Mahaney is now the largest surveyed (by FactSet) bull of Shopify’s stock.
Mahaney also commented that the recent performance results make Shopify the
second largest e-commerce retailer (in aggregate) in the United States after
Amazon.

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