Shopify SHOP is scheduled to report its third-quarter 2022 results on Oct 27.
The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $1.33 billion, suggesting growth of 18.60% from the year-ago quarter’s reported figure.
The consensus mark for loss is pegged at 7 cents per share, widened by a penny over the past 30 days. Shopify reported earnings of 8 cents per share in the year-ago quarter.
The company’s earnings missed the Zacks Consensus Estimate in three of the trailing four quarters and beat the same in the remaining quarter, delivering a negative earnings surprise of 77.37%, on average.
Shopify Inc. Price and EPS Surprise
Shopify Inc. price-eps-surprise | Shopify Inc. Quote
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
Shopify’s third-quarter 2022 results are expected to suffer from a challenging macro environment and higher inflation. Moreover, cautious consumer spending is expected to have dragged the top-line growth down.
Shopify’s margin expansion has been facing challenges from higher investments in product development, as well as fulfillment platforms and an unfavorable mix. The trend is likely to have continued in the to-be-reported quarter.
The company has been investing in developing the best products for modern e-commerce. This has increased Shopify’s merchant base, a trend likely to have continued in the to-be-reported quarter.
In the last reported quarter, Monthly Recurring Revenues (MRR) were up 13% year over year, reaching $107.2 million as new merchants joined the platform and the number of retail locations using POS Pro increased.
The Zacks Consensus Estimate for MRR is pegged at $112 million, indicating 13.1% growth from the figure reported in the year-ago quarter.
Meanwhile, the continued adoption of Shopify products such as Shop Pay, Shop Pay Installments and Shopify Balance is likely to have driven the company’s top line.
In the last reported quarter, Gross Merchandise Volume (GMV) was up 11% year over year, reaching $46.9 billion.
Shopify’s Point-of-Sale Pro solution has been gaining traction among leading retailers and top-tier brands. The company’s initiatives to modernize the offline retail experience with the addition of Tap to Pay on iPhone and Google Local Inventory have been noteworthy.
The Zacks Consensus Estimate for GMV is pegged at $46.92 billion, indicating 12.2% growth from the figure reported in the year-ago quarter.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Shopify has an Earnings ESP of +85.05% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are a few other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings in their upcoming releases:
Airbnb ABNB has an Earnings ESP of +5.52% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Airbnb shares are down 29.3% year to date. ABNB is set to report its third-quarter 2022 results on Nov 1.
ZoomInfo ZI has an Earnings ESP of +1.27% and a Zacks Rank #2.
ZoomInfo shares have declined 27.3% on a year-to-date basis. ZI is set to report its third-quarter 2022 results on Nov 1.
Apple AAPL has an Earnings ESP of +0.89% and a Zacks Rank #3.
Apple shares are down 14.9% year to date. AAPL is set to report its fourth-quarter fiscal 2022 results on Oct 27.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Apple Inc. (AAPL): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
