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Here's Why Shopify (SHOP) is a Must-Buy Stock Right Now
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Shopify (SHOP - Free Report) is riding on an expanding clientele and strong portfolio, which are helping it win new customers and drive top-line growth. Its shares have returned 125.3% in the year-to-date period, outperforming the Zacks Internet Services industry’s rise of 60.8% and the Zacks Computer and Technology sector’s surge of 52.3%.
Shopify’s prospects are primarily driven by its strategy of continuously investing in developing the best solutions for modern e-commerce and expanding its merchant base. In the third quarter of fiscal 2023, Merchant Solutions revenues increased 24.2% year over year to reach $1.23 billion.
Shopify’s POS Pro solution has been gaining traction among leading retailers and top-tier brands. Shopify exited third-quarter 2023 with a 34% increase in the number of POS Pro subscribers.
Monthly recurring revenues (MRR) increased 32% year over year to reach $141 million.
Revenues from subscriptions increased 28.9% year over year to $486 million, thanks to the increasing number of subscribers across all its subscription plans.
The continuous adoption of Shopify products such as Shop Pay, Shop Pay Instalments, and Shopify Balance has benefited the company’s top line.
Solutions like Shopify Audiences, Shopify Collabs, POSGo, Tap to Pay, integrated Twitter Shopping and YouTube channels have also strengthened its relationships with buyers. These factors aided gross merchandise volume (GMV) growth, which increased 22% year over year to reach $56.2 billion.
Enhanced Product Capabilities Aid Prospects
Expanding its product portfolio, Shopify recently made advances in its AI capabilities by integrating Shopify Magic across its products and workflows, which is boosting the merchant’s productivity and creativity.
With the Launch of Shopify Checkout in 2022, Shopify provided a secure and seamless checkout experience to its merchants. Recently, the company redesigned it by launching Checkout Extensibility to handle high volumes, load faster and enhance conversion.
Expanding its subscription-based plans, Shopify recently launched the Retail Plan, featuring Shopify POS Pro to help brick-and-mortar stores build their online presence.
Strong Partner Base to Drive Growth
Shopify is benefiting from an expanding partner base that includes Amazon (AMZN - Free Report) , Flexport, Faire, WPP (WPP - Free Report) and many more.
Shopify partnered with Amazon to release an app on Shopify stores for merchants to offer Buy with Prime directly within their Shopify Checkout.
Recently, the company established a partnership with Faire to boost its B2B offerings and accelerate growth for the brands and independent merchants that the two companies serve.
Shopify is collaborating with WPP to jointly develop products and link WPP's commerce expert network with its platform. This will help brands scale faster and reach more customers from consumer-packaged goods, health and wellness, and fashion industries.
Shopify’s 2023 View Strong
For the fourth quarter of 2023, Shopify expects revenue growth in the high teens on a year-over-year basis. Adjusting for a 400-500 basis points 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 the fourth quarter of fiscal 2023 revenues is pegged at $2.07 billion, indicating year-over-year growth of 19.1%. The consensus mark for earnings is pegged at 31 cents per share, unchanged over the past 30 days.
For fiscal 2023, the company expects revenues to grow at a mid-twenties percentage rate on a year-over-year basis.
The consensus estimate for 2023 revenues is pegged at $6.98 billion, indicating year-over-year growth of 24.7%. The consensus mark for earnings is pegged at 70 cents per share, unchanged over the past 30 days.
Zacks Rank
Currently, Shopify sports a Zacks Rank #1 (Strong Buy).
Image: Bigstock
Here's Why Shopify (SHOP) is a Must-Buy Stock Right Now
Shopify (SHOP - Free Report) is riding on an expanding clientele and strong portfolio, which are helping it win new customers and drive top-line growth. Its shares have returned 125.3% in the year-to-date period, outperforming the Zacks Internet Services industry’s rise of 60.8% and the Zacks Computer and Technology sector’s surge of 52.3%.
Shopify’s prospects are primarily driven by its strategy of continuously investing in developing the best solutions for modern e-commerce and expanding its merchant base. In the third quarter of fiscal 2023, Merchant Solutions revenues increased 24.2% year over year to reach $1.23 billion.
Shopify’s POS Pro solution has been gaining traction among leading retailers and top-tier brands. Shopify exited third-quarter 2023 with a 34% increase in the number of POS Pro subscribers.
Monthly recurring revenues (MRR) increased 32% year over year to reach $141 million.
Shopify Inc. Price and Consensus
Shopify Inc. price-consensus-chart | Shopify Inc. Quote
Revenues from subscriptions increased 28.9% year over year to $486 million, thanks to the increasing number of subscribers across all its subscription plans.
The continuous adoption of Shopify products such as Shop Pay, Shop Pay Instalments, and Shopify Balance has benefited the company’s top line.
Solutions like Shopify Audiences, Shopify Collabs, POSGo, Tap to Pay, integrated Twitter Shopping and YouTube channels have also strengthened its relationships with buyers. These factors aided gross merchandise volume (GMV) growth, which increased 22% year over year to reach $56.2 billion.
Enhanced Product Capabilities Aid Prospects
Expanding its product portfolio, Shopify recently made advances in its AI capabilities by integrating Shopify Magic across its products and workflows, which is boosting the merchant’s productivity and creativity.
With the Launch of Shopify Checkout in 2022, Shopify provided a secure and seamless checkout experience to its merchants. Recently, the company redesigned it by launching Checkout Extensibility to handle high volumes, load faster and enhance conversion.
Expanding its subscription-based plans, Shopify recently launched the Retail Plan, featuring Shopify POS Pro to help brick-and-mortar stores build their online presence.
Strong Partner Base to Drive Growth
Shopify is benefiting from an expanding partner base that includes Amazon (AMZN - Free Report) , Flexport, Faire, WPP (WPP - Free Report) and many more.
Shopify partnered with Amazon to release an app on Shopify stores for merchants to offer Buy with Prime directly within their Shopify Checkout.
Recently, the company established a partnership with Faire to boost its B2B offerings and accelerate growth for the brands and independent merchants that the two companies serve.
Shopify is collaborating with WPP to jointly develop products and link WPP's commerce expert network with its platform. This will help brands scale faster and reach more customers from consumer-packaged goods, health and wellness, and fashion industries.
Shopify’s 2023 View Strong
For the fourth quarter of 2023, Shopify expects revenue growth in the high teens on a year-over-year basis. Adjusting for a 400-500 basis points 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 the fourth quarter of fiscal 2023 revenues is pegged at $2.07 billion, indicating year-over-year growth of 19.1%. The consensus mark for earnings is pegged at 31 cents per share, unchanged over the past 30 days.
For fiscal 2023, the company expects revenues to grow at a mid-twenties percentage rate on a year-over-year basis.
The consensus estimate for 2023 revenues is pegged at $6.98 billion, indicating year-over-year growth of 24.7%. The consensus mark for earnings is pegged at 70 cents per share, unchanged over the past 30 days.
Zacks Rank
Currently, Shopify sports a Zacks Rank #1 (Strong Buy).
Another Stock to Consider
Investors can consider Camtek (CAMT - Free Report) from the broader technology sector. It also carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Camtek shares have returned 220.4% on a year-to-date basis.
The long-term earnings growth rate for CAMT is pegged at 12.3%.