Shopify stock fell Wednesday based on December quarter earnings, revenue and total merchandise volume that beat consensus estimates. Management provided an overview of revenue for 2022 for SHOP stock as the coronavirus emergency fades.
Canada Shopify (a store) reported fourth-quarter earnings before the market opened on Wednesday.
For the quarter ended December 31, Shopify’s earnings came in at 1.36 cents per share on an adjusted basis, down 14% from the same period last year. The company said revenue rose 41 percent to $1.38 billion.
Analysts expected Shopify to earn $1.30 per share on revenue of $1.34 billion. A year ago, Shopify earned $1.58 per share on revenue of $978 million.
Total merchandise volume from merchant customers increased 31% to $54.1 billion versus estimates of $53.03 billion.
Shopify stock fell 6.1% to nearly 835 before the market opened in stock market today.
“Our initial impression is that the absolute results were strong given tough comparisons, but did not live up to buying expectations,” Samad Samana, an analyst at Jefferies, said in a report. He added that the gross profit margin of 50.8% was down from the street estimate of 52.8%.
As Shopify earnings report approaches, ecommerce stock is down 35% in 2022.
Shopify Stock: Management provides general revenue forecasts
In the fourth quarter, Shopify said commerce solutions revenue rose 47% to $1.03 billion. Subscription Solutions revenue increased 26% to $351.2 million. Analysts expected business solutions revenue of $985 million and subscription solutions revenue of $357 million.
For the full year of 2022, Shopify said it expects “lower year-over-year revenue growth in the first quarter of 2022 and higher in the fourth quarter of 2022.” “We do not expect the e-commerce acceleration caused by COVID in the first half of 2021 to be repeated from government shutdowns and stimulus in the first half of 2022,” the company said.
Additionally, Shopify said it expects “Merchant Solutions’ revenue growth to more than double the year-over-year revenue growth rate for subscription solutions, as merchants benefit more from our offerings, and as we expand existing products into new geographies and roll out the latest features such as Shopify Markets.”
Shopify sets up e-commerce sites for small businesses, partnering with others to handle digital payments and shipping. Also, the e-commerce company has ramped up commercial lending.
Also, the company has a relative strength rating of 13 out of a possible 99, according to IBD stock check.
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