SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Shopify Inc (SHOP: NASDAQ) SHOP.TO
SHOP 1,426-4.7%Oct 22 4:00 PM EDT

 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Glenn Petersen who wrote (48)2/18/2021 4:47:33 AM
From: Glenn Petersen   of 54
 
Shopify Slips After Warning Revenue Growth Will Slow in 2021

By \ Danielle Bochove
Bloomberg
February 17, 2021, 6:22 AM CST
Updated on February 17, 2021, 3:44 PM CST

-- Company says it will ‘aggressively’ reinvest in products

-- Gross merchandise value nearly doubles in 4Q to $41.1 billion

Canadian e-commerce firm Shopify Inc. says it will take advantage of “unprecedented opportunities” in 2021 to speed up innovation and expand into new markets, but warned that its growth rate will slow.

Revenue will grow “rapidly” this year but not as quickly as in 2020, when it increased 86% to $2.93 billion, the company said Wednesday. It didn’t give specific guidance on earnings for the current year. The arrival of vaccines could see some consumer spending rotate back to bricks-and-mortar retailers, Ottawa-based Shopify said.

Shopify fell as much as 8.8% in intraday trade in New York before recovering to close down 3.3% at $1,425.

Revenue in the fourth quarter was $978 million, soaring past analysts’ forecasts for $910 million, propelled by a boom in online shopping during the global pandemic. The company said it plans to reinvest gross profits “back into our business as aggressively as we can.”

Shopify is investing in product marketing and in-country sales teams in countries where it already has a good foothold, President Harley Finkelstein said on a conference call, but intends to take a “meticulous and very strategic approach” to international expansion.

“Some other countries that we have on our radar, we don’t think it’s the right time to go really deep. That will happen in the future,” he said.
Gross merchandise value -- the broadest measure of product sales flowing through Shopify’s platform -- was $41.1 billion in the fourth quarter, up 99% from the same quarter a year earlier, helped by soaring demand for online shopping during the global pandemic. Full-year GMV was $119.6 billion.



“I think you have some profit-taking and I think investor expectations were very, very high,” Jefferies analyst Samad Samana said of the share decline. On the earnings, Samana said: “We view it as a capstone to an incredible 2020, a year in which they saw growth that nobody could have anticipated.”

Shopify will spend money to improve its software platform and develop its payments, shipping, capital and Shopify Plus products, the company said in a presentation to investors.

Other highlights in the earnings report:

The company posted fourth quarter adjusted earnings of $1.58 per share that beat analyst estimates of $1.21 per share.

-- Revenue of $977.7 million was nearly double the $505.2 million a year earlier.

-- Shopify expects the first quarter of 2021 to contribute the smallest share of this year’s sales and Q4 the largest.

-- Retailers from from Under Armour Inc. to Coach parent Tapestry Inc. have seen continuing strength in online sales as the pandemic lingers. That said, bricks-and-mortar retailers are still hoping for a recovery in 2021 as vaccination efforts gain momentum.

Some analysts have questioned whether Shopify’s growth trajectory is sustainable. However, big Wall Street names continue to pump billions of dollars into online retailers.

Since it was founded in 2004, Shopify has expanded from a core software business, helping businesses get online quickly, to providing an array of services to companies including payments, lending, and shipping.

(Updates share price in paragraph three)

Story Link
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext