Shopify (SHOP) to Report Q3 Earnings: What's in the Cards?

Shopify SHOP is scheduled to report third-quarter 2021 results on Oct 28.

The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $1.15 billion, suggesting growth of 49.5% from the year-ago quarter’s reported figure.

The consensus mark for earnings is pegged at $1.28 per share, indicating year-over-year growth of 13.3%.

The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, delivering an earnings surprise of 110.7%, on average.

Shopify Inc. Price and EPS Surprise

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 is benefiting from growth induced by e-commerce boom in the merchant base. Robust uptick in Shopify Shipping, Shopify Payments and Shopify Capital is expected to have aided top line growth in the to-be-reported quarter.

The company has been focused on winning merchants on a regular basis based on product offerings, including Shop Pay and Shop Pay Installments, as well as features like end-to-end order tracking. Moreover, solid adoption of new merchant-friendly applications is expected to have driven top-line growth.

Partnerships with Facebook FB and Google are expected to expand Shopify’s merchant base. Also, initiatives aimed at international expansion are noteworthy.

However, higher investments on product development and fulfillment platform amid stiff competition in the e-commerce space are likely to limit margin expansion in the to-be-reported 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. But that’s not the case here.

Shopify has an Earnings ESP of -7.52% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Apple AAPL has an Earnings ESP of +5.69% and is Zacks #2 Ranked. You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Materials AMAT has an Earnings ESP of +0.52% and carries a Zacks Rank of 2, at present.

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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.

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