Shares in an e-commerce company Shopify (SHOP) rose on Thursday after the company reported a smaller-than-expected loss for the September quarter and revenue that beat analysts’ estimates. SHOP shares rose double digits on the news.
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Canada-based Shopify said it lost 2 cents a share on an adjusted basis. Revenue for SHOP shares rose 22% to $1.4 billion, the company said. Revenue growth accelerated after six quarters of slowing growth due to the easing of the coronavirus pandemic and the normalization of online shopping.
Analysts expected Shopify to report a loss of 7 cents on sales of $1.34 billion. A year earlier, Shopify was earning 8 cents a share on revenue of $1.12 million. Third quarter results include recently acquired logistics company Deliverr.
“The results indicated that SHOP stock is not out of the woods but is making positive progress,” Jefferies analyst Samad Samana said in a note to clients.
SHOP stock up 17%
At DA Davidson, analyst Tom Forte said in his note to clients, “At first glance, we can see that Shopify’s sales exceeded expectations for the September quarter as it reflects its ability to embrace not only the opportunities of online e-commerce, but also… of offline retail one; for example, with its point-of-sale efforts.”
He added that Shopify “may have benefited from the strength of the US dollar against the Canadian dollar with its revenue denominated in US dollars and many of its operating expenses denominated in Canadian dollars.”
SHOP stock is up 17% in morning trade in the stock market today to 34. Before Thursday, Shopify stock was down 78% in 2022 amid the bear market.
Merchandise to retail customers was also $46.2 billion, up 11%, slightly below the estimate of $46.87 billion.
Shopify builds ecommerce sites for small businesses and partners with others to process digital payments and shipping.
Meanwhile, the company plans to cut 10% of its workforce. SHOP shares have a relative strength rating of 13 out of 99 best possible, according to the IBD Stock Check-up.
Follow Reinhard Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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