Shopify Stock Falls As Q4 Earnings Beat, But No Specific 2021 Guidance Given

Shopify earnings, revenue and gross merchandise volume topped December-quarter analyst estimates on Wednesday as e-commerce continued to boom amid the coronavirus pandemic. Shopify stock fell as the company declined to issue specific revenue guidance for 2021 after a blowout year.


Canada-based Shopify (SHOP) said it earned an adjusted $1.58 per share in the fourth quarter, up 267% from the year earlier period. Revenue jumped 94% to $977.7 million, the company said.

Analysts expected Shopify earnings of $1.28 a share on revenue of $910.2 million for the period ended Dec. 31. A year earlier, Shopify earned 43 cents per share on revenue of $505.2 million.

“We believe Q4 results were largely in-line with high buyside expectations. SHOP also sounded confident on 2021 growth,” Jefferies analyst Samad Samana said in a report to clients.

Shopify stock fell 4.9% to near 1,401.70 in midday trading on the stock market today. Shares set a record close on Tuesday.

From a technical viewpoint, SHOP stock is extended from an entry point of 1,285.28. Shopify stock needs to form a new base to forge a proper entry point.

Shopify Earnings: GMV Growth Decelerates

Gross merchandise volume from merchant customers jumped 99% to $41.1 billion vs. estimates of $38.21 billion. In the September quarter, GMV jumped 109%. It rose 119% in June quarter.

Shopify sets up e-commerce websites for small businesses, and partners with others to handle digital payments and shipping. The e-commerce firm has stepped up business lending amid the coronavirus emergency. Free trials during boosted online store creation.

Shopify said fourth-quarter merchant solutions revenue climbed 117% to $698.3 million vs. estimates of $643 million. In addition, subscription solutions revenue rose 53% to $279.4 vs. estimates of $265 million.

Difficult Year-Over-Year Comparisons In 2021

Starting in the current March quarter, Shopify stock will have more difficult year-over-year comparisons, analysts say

In its earnings release, Shopify said: “We expect that we will continue to grow revenue rapidly in 2021, albeit at a lower rate than in 2020. While we expect that the first quarter will likely still contribute the smallest share of full-year revenue and the fourth quarter the largest, the revenue spread may be more evenly distributed across the four quarters than it has been historically if the rollout of a vaccine shifts more spending to services and offline shopping towards the back half of the year.”

In addition, Shopify said it planned to hike investment in sales and marketing as well as research and development.

Also, Shopify is building a U.S. distribution network to store and ship products for its merchant customers.

Ahead of the Shopify earnings report, the company had a Relative Strength Rating of 86 out of a possible 99, according to IBD Stock Checkup.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.


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