Shopify’s Special Q3 Gift Wall Street Didn’t See Coming...

Tis the season where the holidays ring, and the money sings as every degenerate with a Shopify store posts fake lambo pictures while becoming the epitome of the “fake it till you make it" mantra. However, when it comes to Shopify itself though,… well, money is definitely singing and bells are ringa ding dingin’ after their latest earnings. 

(Source: CNBC) 

ICYMI, Shopify shares posted an impressive 21% boom yesterday earnings came in at 35 cents per share, blowing past the 27 cents that analysts were expecting. Revenue also came in with a “hold my beer” moment as it crushed Wall Street's $2.12 billion forecast with $2.16 billion. 

In addition, Shopify stated that they expect revenue in the fourth quarter to grow at a “mid-to-high twenties” percentage rate. The best part? Wall Street was only expecting a modest 22.8%. Meaning, Shopify told some poor Wall Street analyst who makes Brooks Brothers his entire personality to shove it. 

(Source: Giphy) 

One of the larger catalysts to Shopify’s success last quarter came down to their Gross Merchandise Volume (a.k.a. The total value of stuff solid on its platform) - which hit $69.7 billion, up 24% year-over-year. Add in the fact that analysts were only expecting $68.1 billion, and once again, Shopify is body baggin’ estimates. 

But, the real driver of Shopify’s growth, you ask? Well, in short, Shopify has been shelling out big bucks on marketing—because why not burn some short-term profit if it means grabbing more of the e-commerce pie from Amazon, Walmart, and the rest of the usual suspects? Especially since it seems to be working. 

(Source: Wall Street Journal) 

For instance, Shopify’s president, Harley Finkelstein, couldn’t resist name-dropping some big new customers like Lionsgate, Reebok, Off-White, and—wait for it—Vera Bradley. Yes, that Vera Bradley, because apparently floral bags are still a thing.

What’s more is that Finkelstein also made it clear that Shopify isn’t just for Etsy wannabes and indie makers anymore. Nope, they’re playing in the big leagues now. “We’re well-positioned for growth across different merchant segments, sizes, geographies, channels, and products,” he said on the earnings call. Translation: Shopify just said “F around and find out” to pretty much everyone. 

(Source: Giphy) 

Now of course, there are a few skeptics that didn’t take the invite to the Shopify hype train. JPMorgan’s Reginald Smith (presumably a depressed schmuck anyway with a name like Reginald) pointed out that the stock is “priced for perfection,” meaning, there’s a small margin of error for Shopify to screw up and cause exaggerated havoc in share price. 

And honestly, he’s not necessarily wrong. After a year of beating expectations, the pressure’s on for them to keep delivering. No one’s saying it, but you can practically hear Wall Street holding its breath during every earnings call. 

(Source: Seeking Alpha) 

But for now? Shopify’s third-quarter beatdown shows they’re still on top. And with Q4—the Super Bowl of e-commerce—just around the corner, they’re not slowing down anytime soon. Investors are betting Shopify’s going to keep making it rain, even if they have to burn a little more cash on marketing and their upgraded AI tech like Shopify Magic and Sidekick.

So heading into the last half of Q4, will they keep the streak alive? If history’s any clue, the answer is probably “hell yeah.” But like anything in life, the only certainty is death and taxes… So with that, do your due diligence and place your bets accordingly.

In the meantime, stay safe and stay frosty, friends! Until next time… 

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