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Factors Set to Drive Shopify's (SHOP) Third-Quarter Earnings

Zacks Equity Research
·2 min read

Shopify SHOP is benefiting from the e-commerce-boom-induced growth in the merchant base. Robust uptick in Shopify Shipping, Shopify Payments and Shopify Capital is expected to have driven top-line growth in third-quarter 2021, which it is set to report on Oct 28.

The company has been focused on winning merchants on a regular basis, based on product offerings including Shop Pay and Shop Pay Installments, as well as features like end-to-end order tracking. Solid adoption of new merchant-friendly applications holds promise.

Partnerships with Facebook FB and Alphabet GOOGL division Google are expected to expand Shopify’s merchant base.

The Zacks Consensus Estimate for third-quarter Gross Merchandise Volume is pegged at $43.51 billion, indicating year-over-year growth of 40.7%.

Click here to know how Shopify’s overall third-quarter results are likely to be.

E-Commerce Spending to Aid Shopify’s Q3 Growth

The massive growth in e-commerce spending is expected to have driven Shopify’s third-quarter results. The company’s cloud-based platform has been capable enough to address the growing needs of merchants at a time when social media, mobile devices and data analytics are transforming the e-commerce market place.

Shopify Inc. Revenue (Quarterly YoY Growth)

Shopify Inc. Revenue (Quarterly YoY Growth)
Shopify Inc. Revenue (Quarterly YoY Growth)

Shopify Inc. revenue-quarterly-yoy-growth | Shopify Inc. Quote

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Net new merchants on Shopify are expected to have improved due to expanded sales channels like Alipay, Pinterest, eBay and Amazon AMZN.

The Zacks Consensus Estimate for Revenues: Merchant Solutions stands at $798 million, indicating 53% growth from the figure reported in the year-ago quarter.

Shopify’s has a rich partner ecosystem, which is expected to have been a growth driver. Shopify is also banking on its new mobile shopping app — Shop, and applications like Shopify Email, Shopify Plus Admin, Shop Pay Installments, Shopify Flow and Shopify Balance. These features are expected to have bolster customer engagement in the third quarter.

The Zacks Consensus Estimate for the Monthly Recurring Revenue (MRR) stands at $103 million, indicating growth of 39.2% from the figure reported in the year-ago quarter.

The consensus mark for revenues: subscription solutions is pegged at $352 million, suggesting 43.7% growth from the figure reported in the year-ago quarter.

Shopify currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report

Facebook, Inc. (FB) : Free Stock Analysis Report

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

Shopify Inc. (SHOP) : Free Stock Analysis Report

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Zacks Investment Research