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Shopify (SHOP) Up 12.4% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Shopify Inc. (SHOP - Free Report) . Shares have added about 12.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Shopify Reports Narrower Loss in Q1, Guidance Up
Shopify reported loss of $0.15, which was $0.07 narrower than the Zacks Consensus Estimate, but wider than $0.11 posted in the year-ago quarter.
Revenues increased 75.2% from the year-ago quarter to $127.4 million, comfortably surpassing the Zacks Consensus Estimate of $122 million. The figure was also better than management’s guided range of $120–$122 million.
Shopify also raised full-year 2017 top-line projections.
Quarter Details
Subscription Solutions revenues grew 60.4% to $62.1 million. This increase was driven by the continued rapid growth in Monthly Recurring Revenue (MRR).
As of Mar 31, 2017 MRR was $20.7 million, up 62% compared with $12.8 million as of Mar 31, 2015. Shopify Plus accounted for 3.5 million or 17% of this MRR compared with 11% of MRR in the year-ago quarter.
Merchant Solutions revenues grew 92% to $65.3 million, backed primarily by the growth of GMV, which soared 81% from the year-ago quarter to $4.8 billion. Gross Payments Volume (GPV) grew to $1.8 billion, which accounted for 38% of GMV processed in the quarter, compared with $1 billion, or 37%, in first-quarter 2016.
Mobile traffic to merchants’ stores continued to grow, reaching 69% of traffic and 59% of orders at the end of March 2017 compared with 62% and 51%, respectively, at the end of Mar 2016.
Gross margin expanded 160 basis points (bps) from the year-ago quarter to 56.7%. The expansion was primarily driven by robust performance across both the segments. Subscription and Merchant solutions gross margin expanded 150 bps and 610 bps, respectively.
Adjusted operating loss (including stock-based compensation) was $14.5 million much wider than loss of $9.7 million reported in the year-ago quarter. The figure was also wider than management’s expectation of an adjusted operating loss of $9–$11 million.
Acquisitions
On Apr 28, 2017, Shopify completed the acquisition of Oberlo UAB, a company that facilitates product sourcing and drop-shipping.
Guidance
For second-quarter 2017, Shopify projects revenues in the range of $142–$144 million. Adjusted operating loss is expected to be in the range of $6–$8 million.
For full-year 2017, management projects revenues in the range of $615–$630 million (up from $580–$600 million). Adjusted operating loss is expected to be in the range of $14–$18 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, the stock has an average Growth Score of 'C', however its Momentum is doing a bit better with a 'B'. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Shopify (SHOP) Up 12.4% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Shopify Inc. (SHOP - Free Report) . Shares have added about 12.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Shopify Reports Narrower Loss in Q1, Guidance Up
Shopify reported loss of $0.15, which was $0.07 narrower than the Zacks Consensus Estimate, but wider than $0.11 posted in the year-ago quarter.
Revenues increased 75.2% from the year-ago quarter to $127.4 million, comfortably surpassing the Zacks Consensus Estimate of $122 million. The figure was also better than management’s guided range of $120–$122 million.
Shopify also raised full-year 2017 top-line projections.
Quarter Details
Subscription Solutions revenues grew 60.4% to $62.1 million. This increase was driven by the continued rapid growth in Monthly Recurring Revenue (MRR).
As of Mar 31, 2017 MRR was $20.7 million, up 62% compared with $12.8 million as of Mar 31, 2015. Shopify Plus accounted for 3.5 million or 17% of this MRR compared with 11% of MRR in the year-ago quarter.
Merchant Solutions revenues grew 92% to $65.3 million, backed primarily by the growth of GMV, which soared 81% from the year-ago quarter to $4.8 billion. Gross Payments Volume (GPV) grew to $1.8 billion, which accounted for 38% of GMV processed in the quarter, compared with $1 billion, or 37%, in first-quarter 2016.
Mobile traffic to merchants’ stores continued to grow, reaching 69% of traffic and 59% of orders at the end of March 2017 compared with 62% and 51%, respectively, at the end of Mar 2016.
Gross margin expanded 160 basis points (bps) from the year-ago quarter to 56.7%. The expansion was primarily driven by robust performance across both the segments. Subscription and Merchant solutions gross margin expanded 150 bps and 610 bps, respectively.
Adjusted operating loss (including stock-based compensation) was $14.5 million much wider than loss of $9.7 million reported in the year-ago quarter. The figure was also wider than management’s expectation of an adjusted operating loss of $9–$11 million.
Acquisitions
On Apr 28, 2017, Shopify completed the acquisition of Oberlo UAB, a company that facilitates product sourcing and drop-shipping.
Guidance
For second-quarter 2017, Shopify projects revenues in the range of $142–$144 million. Adjusted operating loss is expected to be in the range of $6–$8 million.
For full-year 2017, management projects revenues in the range of $615–$630 million (up from $580–$600 million). Adjusted operating loss is expected to be in the range of $14–$18 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Shopify Inc. Price and Consensus
Shopify Inc. Price and Consensus | Shopify Inc. Quote
VGM Scores
At this time, the stock has an average Growth Score of 'C', however its Momentum is doing a bit better with a 'B'. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.