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

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Shopify (SHOP - Free Report) is scheduled to report its fourth-quarter 2022 results on Feb 15.

The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $1.64 billion, suggesting growth of 119.15% from the year-ago quarter’s reported figure.

The consensus mark for earnings is pegged at breakeven, unchanged over the past 30 days. Shopify reported earnings of 14 cents per share in the year-ago quarter.

Shopify’s earnings missed the Zacks Consensus Estimate in two of the trailing four quarters and beat the same in the remaining two quarters, delivering a negative earnings surprise of 50.33%, on average.

Shopify Inc. Price and EPS Surprise

Shopify Inc. Price and EPS Surprise

Shopify Inc. price-eps-surprise | Shopify Inc. Quote

Let’s see how things have shaped up for the upcoming announcement.

Factors to Note

Shopify’s fourth-quarter 2022 results are expected to reflect the adverse effects of a challenging macro environment, raging inflation and higher interest expenses. Moreover, cautious consumer spending is expected to have dampened top-line growth.

Shopify’s margin expansion has been facing challenges from higher investments in product development, as well as fulfillment platforms and an unfavorable mix. The trend is likely to have continued in the to-be-reported quarter.

Nevertheless, Shopify’s investments in developing the best products for modern e-commerce are expected to have helped it to expand its merchant base, thereby driving top-line growth in the to-be-reported quarter.

In the last reported quarter, Monthly Recurring Revenues (MRR) were up 8% year over year, reaching $107 million as new merchants joined the platform and the number of retail locations using POS Pro increased.

The Zacks Consensus Estimate for MRR is pegged at $113 million, indicating 10.8% growth from the figure reported in the year-ago quarter.

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, Gross Merchandise Volume (GMV) was up 11% year over year, reaching $46.2 billion.

Shopify’s Point-of-Sale Pro solution has been gaining traction among leading retailers and top-tier brands. The company’s initiatives to modernize the offline retail experience with the addition of Tap to Pay on iPhone and Google Local Inventory have been noteworthy.

The Zacks Consensus Estimate for GMV is pegged at $59 billion, indicating 9.05% growth from the figure reported in the year-ago quarter.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Shopify has an Earnings ESP of -6.67% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Salesforce (CRM - Free Report) has an Earnings ESP of +0.32% and a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

salesforce shares have declined 19.1% in the past year. CRM is set to report its fourth-quarter fiscal 2023 results on Mar 1.

Cambium Networks (CMBM - Free Report) has an Earnings ESP of +2.46% and a Zacks Rank #3.

Cambium shares have declined 9.2% in the past year. CMBM is set to report its fourth-quarter 2022 results on Feb 16.

Airbnb (ABNB - Free Report) has an Earnings ESP of +8.10% and a Zacks Rank #3.

ABNB shares have declined 35.9% in the past year. Airbnb is set to report its fourth-quarter 2022 results on Feb 14.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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