Can Shopify Keep Up the Pace in 2019 With Q3 Earnings?

Shopify Inc. (NYSE: SHOP) is scheduled to release its third-quarter earnings report before the markets open on Tuesday. The consensus estimates are calling for $0.11 in earnings per share (EPS) and $383.76 million in revenue. The same period of last year reportedly had $0.04 in EPS and $270.06 million in revenue.

The company previously issued guidance calling for revenue in the range of $377 million to $382 million and adjusted operating income in the range of flat to $3 million.

In the second quarter, its Subscription Solutions revenue grew 38% to $153.0 million in the latest period. This increase was driven primarily by growth in monthly recurring revenue, largely due to an increase in the number of merchants joining the Shopify platform.

Separately, Merchant Solutions revenue grew 56%, to $208.9 million, driven primarily by the growth of gross merchandise volume.

At the end of the prior quarter, monthly recurring revenue increased 34% year over year to $47.1 million and growth of gross merchandise volume increased 51% to $13.8 billion.

Excluding Monday’s move, Shopify had outperformed the broad markets, with the stock up about 129% year to date. In the past 52 weeks, the stock was up closer to 160%.

A few analysts weighed in on Shopify ahead of the report:

  • RBC has an Outperform rating with a $400 price target.
  • Rosenblatt Securities rates it a Buy rating a $481 price target.
  • CIBC’s Hold rating comes with a $350 price target.
  • Credit Suisse has a Buy rating and a $370 price target.
  • Piper Jaffray has a Hold rating with a $320 target price.
  • Jefferies has a Hold rating with a $300 target price.

Shares of Shopify traded up about 2% Monday to $323.22, in a 52-week range of $117.64 to $409.61. The consensus price target is $362.04.