Analyzing Shopify's Q3 Earnings: Market Expectations and Volatility Insight
Analyzing Shopify's Q3 Earnings: Market Expectations and Volatility Insight
Stock in the Canada-based the E-commerce giant has risen nearly 10% this month
- Shopify is set to announce its third-quarter fiscal results on Tuesday, Nov. 12.
- The report comes amid a rally in the e-commerce company’s stock price.
- Analysts expect its earnings and revenue to increase from a year ago.
Shopify (SHOP) is set to report third-quarter fiscal earnings on Tuesday, Nov. 12, before the market open.
The Canadian e-commerce company saw a rally ahead of earnings, rising nearly 10% from the start of the month as of today, helped by a risk-on tone across equity markets. This compares to the Nasdaq’s nearly 6% gain over the same period.
SHOP rose sharply in the days following the U.S. election, brushing off fears of possible tariffs from the Trump administration. Canadian Prime Minister Justin Trudeau successfully navigated a trade deal with the last Trump administration, crafting the United States-Mexico-Canada Agreement (USMCA), which was mostly mutually beneficial for the countries involved.
Shopify has established itself as one of the preeminent online stores for small businesses, but the company has recently shifted its strategy to broaden its net and capture larger online sellers. That has put it up against Salesforce (CRM).
Bloomberg reported in October that Shopify has already lured away hundreds of Salesforce clients, including notable brands like Toys “R” Us and Casper. If successful, it could generate tens of millions in additional revenue per month for Shopify.
What do analysts expect?
Analysts anticipate Shopify will post $0.28 in earnings per share (EPS) on $2.15 billion in revenue, according to TradingView. That would be up from $0.24 per share and $1.74 billion in revenue a year ago. Last quarter, Shopify reported EPS of $0.26 on $2.05 billion in revenue.
The company has beaten earnings and revenue expectations in five of the last five quarters. The consensus analyst one-year price target for SHOP is 85.65 per share, with the high end of estimates at 101.89.
Over the past three months, 51 analysts have rated the stock: 30 have a strong buy or buy rating and 20 have a hold rating, while only one has a sell rating on the stock.
Trading Shopify earnings
Shopify holds an implied volatility rank (IVR) of 69.7, meaning volatility is elevated relative to the past 12 months of trading. The implied move, based on the Nov. 15 options expiration, calls for a move of +/- 10.22 points, or about 12% of today’s $85.67 stock price. Given the heightened volatility, trades focused on selling premium may be attractive for investors looking for an earnings play.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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