These Analysts Revise Their Forecasts On Shopify After Q1 Results

Shopify Inc SHOP reported upbeat earnings and sales results for its first quarter on Wednesday.

The company clocked fiscal first-quarter 2024 revenue growth of 23% year-over-year to $1.86 billion, which beat the consensus estimate of $1.845 billion. Revenue grew by 29% Y/Y after adjusting for the sale of its logistics businesses. The e-commerce platform company reported adjusted EPS of 20 cents, which beat analyst estimates of 17 cents, according to data from Benzinga Pro.

Gross merchandise volume increased 23% year-over-year to $60.9 billion. Gross payments volume came in at $36.2 billion. Merchant solutions revenue increased 20% year-over-year to $1.4 billion.

“You’re seeing the strongest version of Shopify in our history. Our outstanding Q1 performance is clear proof of our dedication to the new shape of Shopify, our commitment to operating with a consistent team size, and our focus on building for the long-term to deliver both growth and profitability,” said Harley Finkelstein, President of Shopify. “We are building a 100-year company, and we will continue to remain fiercely agile, capitalizing on every opportunity that accelerates the success of our merchants, enables us to continue to build world-class products, and enhances operational efficiency for better returns.”

Shopify expects revenue growth of high-teens percentage rate on a Y/Y basis versus a $2.03 billion consensus. The company expects the gross margin to decrease by 50 bps sequentially. It projects a free cash flow margin to be similar sequentially.

Shopify shares fell 18.6% to close at $62.73 on Wednesday.

These analysts made changes to their price targets on Shopify following earnings announcement.

• Mizuho cut the price target on Shopify from $75 to $65. Mizuho analyst Siti Panigrahi maintained a Neutral rating.
• Baird cut the price target on Shopify from $87 to $77. Baird analyst Colin Sebastian maintained an Outperform rating.
• Piper Sandler analyst Clarke Jeffries upgraded Shopify from Underweight to Neutral and maintained the price target of $63.

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