Shopify Earnings Preview: Here’s What To Expect

Shopify (SHOP) will announce its 2021 second-quarter results on July 28 before the opening bell. Over the past year, shares of the e-commerce platform have jumped by more than 50%. Year-to-date, the stock has gained around 40% and is currently trading at over C$1,980 per share. Solid results could push the stock higher, so let’s have a look at what analysts are expecting.

The Zacks Consensus Estimate for earnings is $0.98 per share, which represents a decline of 6.7% from the prior-year quarter. The estimate for revenue is $1.04 million, indicating growth of 45.7% from the second quarter of 2020.

In the previous quarter, Shopify reported adjusted earnings of $2.01 per share, an increase of 958% from the prior-year quarter. The results also beat the consensus estimate of $0.78. In addition, revenue jumped 110% to $988.6 million and exceeded analysts’ expectations of $853.04 million. Shopify has beaten EPS estimates in the last four quarters.

The company hasn’t provided specific guidance for the second quarter of 2021. Shopify’s performance is expected to have benefited from the continuing online sales momentum triggered by the pandemic. (See Shopify stock charts on TipRanks)

Last week, RBC Capital analyst Paul Treiber kept a Buy rating on SHOP while raising his price target to $1,800 (C$2,258). This implies 12.7% upside potential.

Treiber stated that Shopify has resilient e-commerce sales and solid new merchant adds, with BuiltWith Data showing continued strong merchant growth.

The rest of the Street is cautiously optimistic about SHOP with a Moderate Buy consensus rating based on 12 Buys and 8 Holds. The average Shopify price target of C$2,039.91 implies upside potential of about 2.6% to current levels.

TipRanks’ Smart Score

Shopify scores a 9 out of 10 on the TipRanks Smart Score rating system, indicating that the stock has strong potential to outperform the overall market.