Shopify Q3 Earnings Preview: What to Expect

Shopify (SHOP) will announce its 2021 third-quarter results on October 28 before the opening bell. Shares of the e-commerce platform have jumped approximately 22% year-to-date.

Solid results could push the stock higher, so let’s have a look at what analysts are expecting.

The Zack Consensus Estimates for earnings is $1.28 per share, which represents an increase of 13.3% from the prior-year quarter. The estimate for revenue is $1.15 billion, indicating growth of 49.5% from the third quarter of 2020.

Like many other tech companies, Shopify has stopped giving guidance during the pandemic.

Points to Watch

Shopify is benefiting from the growth driven by the rise of e-commerce in its merchant base. Strong adoption of new merchant-friendly applications is expected to have driven revenue growth. In addition, partnerships with Facebook (FB) and Google are expected to expand Shopify’s merchant base.

Investors are looking beyond third-quarter earnings as they are concerned about worsening supply chains delays, which could impact holiday shopping in the third quarter. Those concerns have weighed on Shopify shares, which have almost 8% in the past five days. (See Insiders’ Hot Stocks on TipRanks)

On October 18, Roth Capital analyst Darren Aftahi kept a Buy rating on SHOP and set a price target of $1,800 (C$2,231.64). This implies 34.7% upside potential.

The rest of the Street is cautiously optimistic about SHOP with a Moderate Buy consensus rating based on 13 Buys and nine Holds. The average Shopify price target of C$2,120.62 implies upside potential of about 28% to current levels.

TipRanks’ Smart Score

SHOP 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.

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