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Shares of Shopify Inc. SHOP have been performing well of late. The company's shares have returned 41.1% in the past year against the industry's decline of 1.25%.
If you haven't taken advantage of the share price appreciation yet, its time you hold the stock in your portfolio as it looks promising and is poised to carry the momentum ahead.
What's Going in Shopify's Favor?
Q2 Results, Upbeat Guidance
Shopify delivered second-quarter 2018 adjusted earnings of 2 cents per share, comparing favorably with the Zacks Consensus Estimate of a loss of 2 cents. The figure also compared favorably with the year-ago quarter’s loss of 1 cent.
Total revenues surged 61.5% from the year-ago quarter to $244.96 million, comfortably outpacing the Zacks Consensus Estimate of $235 million. The figure also fared better than the guided range of $230-$235 million.
Top-line growth benefited from a diversified expanding merchant base. The company continues to launch a number of merchant-friendly applications to meet the requirements of a dynamic retail environment, consequently bolstering its merchant base.
For third-quarter 2018, Shopify projects revenues in the range of $253-$257 million. The Zacks Consensus Estimate is currently pegged at $256.5 million.
For full-year 2018, Shopify raised outlook. Management now envisions revenues in the band of $1.015-$1.025 billion (mid-point at $1.02 billion) better than the previous guided range of $1-$1.01 billion. The Zacks Consensus Estimate is pegged at $1.03 billion, almost in line with the mid-point of the guidance.
Growth Drivers
The company has introduced Shopify Payments in Japan, taking the total number of countries where the solution has been launched to eight.
With an aim to make the platform more merchant friendly, Shopify is working on extending language capabilities beyond English. The focus on local languages is aiding in bolstering international presence. We believe this inclusive move will boost engagement and consequently increase adoption going forward.
Moreover, the company will reap benefits from investments in latest technological developments such as virtual reality (“VR”) and augmented reality (“AR”), going forward.
Shopify has been developing various apps, including various AR based applications to streamline customer experience.
The company also partnered with Google to empower physical stores with enhanced security. The company provides Google Wi-Fi routers and Nest cam hardware across its Hardware Stores, to around 70,000 point-of-sale merchants. This aids businesses to monitor their physical outlets leveraging the Shopify dashboard, consequently streamlining management processes.