Shopify Earnings Due Before The Open, Stock (SHOP) Moving Closer To Highs

Shopify's stock (NYSE: SHOP) has had a strong year leading into the latest set earnings, with Q2 numbers due out before the market opens tomorrow morning. With SHOP having gained 141% over the past 12 months, and trading close to multi-year highs, expectations are for double digit growth, and then some.

Analysts are projecting an EPS of $0.29 for the upcoming quarter, up from $0.26 a year ago. Revenue is expected to come in at $2.55 billion for the quarter, a 24.56% increase from $2.04 billion a year ago, indicating strong year-over-year sales growth.

Looking to the previous quarter, Q1 results painted a mixed picture. While revenues surged by 27% year-over-year to $2.36 billion, Shopify reported a net loss of $682 million, translating to a loss per share of $0.53, a significant deterioration compared to the $0.21 loss per share in the first quarter of 2024.

This discrepancy between revenue growth and profitability is a critical area of focus for investors.

Analysts' opinions on Shopify are divided. The average price target of $120.69 suggests a potential downside from current levels, despite the prevailing “Buy” rating, with 33 of the 49 analysts opting for Buy or Strong Buy. Adjustments could be on the horizon, depending on how this quarter stacks up to expectations, with analysis reflecting this uncertainty.

As earnings approach, EPS forecasts have been shifting, with sentiment improving in one case, and softening for 4.

The company will host a conference call at 8:30 a.m. ET to discuss the results, providing further insights into their performance and future strategies. All eyes will be on CEO Tobi Lütke and his team as they navigate questions about growth, profitability, and competitive pressures.