Latest news with #HarleyFinkelstein
Yahoo
14-05-2025
- Business
- Yahoo
Strong Q1 and Nasdaq Listing Signal Bright Future for Shopify Stock (SHOP)
Shopify (SHOP) is firing on all cylinders, recording awe-inspiring results that show zero sign of slowing down. Merchant adoption continues to climb, and Shopify Payments is gaining notable traction. On top of that, the company is generating solid free cash flow as it tightens costs and introduces more high-margin products. To symbolize the company's coming of age, Shopify is set to join the Nasdaq 100 (NDX) and the Nasdaq-100 Equal Weighted Index (NDXE) later this month. Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter With global growth, smarter AI tools, and a leaner operation, Shopify looks well-positioned to maintain this momentum. I'm stoically bullish on SHOP stock and have initiated a long position. Shopify's recent earnings report, which included a 27% YoY rise in revenues and a 22% rise in profit, further entrenches my bullish stance. Shopify's Q1 earnings, which the company posted last Thursday, were nothing short of excellent. Quarterly revenues reached $2.36 billion, with Gross Merchandise Volume (GMV) climbing 23% to $74.75 billion, powered by a 32% surge in international GMV and a staggering 109% leap in B2B GMV. Speaking on the post-earnings call, President Harley Finkelstein pointed to Shopify's unified commerce platform (now live in 39 countries) as a magnet for merchants worldwide. Moreover, Shopify Payments penetration hit 64%, up from 60%, processing $47.5 billion, a 31% jump. The numbers tell a broader story. Offline GMV grew 23%, proving Shopify's not just an online play, while Monthly Recurring Revenue (MRR) advanced 21% to $182 million, driven by Shopify Plus and subscription plans. Management noted the platform's adaptability, with AI tools streamlining merchant operations and cross-border trade holding steady at 15% of GMV. All in all, the writing on the wall is that Shopify's multi-channel prowess spreads at a breakneck pace from mom-and-pop shops to global brands. However, besides Shopifty's impressive top-line growth, its profitability metrics were downright dazzling. Gross profit rose 22% to $1.17 billion, with operating income doubling to $203 million for a 9% margin, up from 5% a year ago. Free cash flow stole the spotlight, surging 56% to $363 million, delivering a 15% margin, marking seven straight quarters of double-digit margins. So, beyond growth, we see disciplined capital and spending controls. Indeed, Shopify's cost management deserves applause. Operating expenses as a percentage of revenue declined from 51% in Q1 2023 to 36% in Q1 2025, easing a long-time investor's worry. Stock-based compensation, another sore spot, is projected to stabilize at $120 million for Q2, a fraction of revenues. In the meantime, Shopify Payments has transformed into a cash machine via frictionless transaction fees, translating to ever-rising gross margins. As a rising number of merchants opt to switch to Shopify Payments for their payment processing over time, there is no reason to assume that this trend is set to reverse anytime soon. Shopify's stock slipped post-earnings, which I found pretty surprising given how powerful its momentum was once again proven to be. Now, historically, SHOP's nosebleed valuations, often over 20x sales, kept cautious investors at bay, with shares still 40% below their 2021 highs. But today's setup is rather different. With revenue and profits compounding at a blistering pace, the stock's forward P/FCF multiple of 61x for 2025, falling to 37x by 2027, appears to be downright reasonable given the pace. In particular, consensus forecasts see free cash flow hitting $1.95 billion this year, $2.46 billion in 2026, and $3.20 billion by 2027. Notably, superb free cash flow should open room for capital return prospects, which Shopify hasn't really explored thus far. As the cash pile grows, management could start returning capital via buybacks or even dividends, which could attract a new cohort of investors to the stock. With the company's net cash position already at a considerable $5.3 billion and tons of cash expected to flow in the coming years, I believe this is an ever-growing possibility. Wall Street's outlook on Shopify is relatively bullish, despite the stock lagging in recent weeks. The stock now has a Strong Buy consensus rating, with 24 analysts currently bullish and 8 staying neutral. Notably, not a single analyst is bearish on the stock. SHOP's average price target is $117.35, indicating an upside potential of 12.5% over the coming twelve months. Shopify's imminent Nasdaq listing and superlative performance results indicate an elegant mix of growth and disciplined spending. The company's ability to scale across online, offline, B2B, and global markets while generating robust cash flows showcases a platform built for endurance. Given the constant reinvention and rollout of features, top-line growth is set to remain vigorous for many quarters to come, and the Q2 guidance for growth in the mid-20s indeed confirms this. Wall Street's free cash flow growth estimates further confirm that Shopify's bottom line is also set to snowball. Add the reasonable valuation and net cash position, and Shopify stock forms a highly compelling case. Disclaimer & DisclosureReport an Issue Sign in to access your portfolio
Yahoo
13-05-2025
- Business
- Yahoo
Why Shopify Inc. (SHOP) Soared Today
We recently published a list of . In this article, we are going to take a look at where Shopify Inc. (NASDAQ:SHOP) stands against other stocks that soared by double digits today. The stock market kicked off the trading week brimming with optimism after the US and China announced a tariff truce on each other's goods. The tech-heavy Nasdaq booked the largest gains among the three major indices, rallying 4.85 percent. The S&P 500 followed with a 3.26-percent increase, and the Dow Jones, with 2.81 percent. Over the weekend, the US and China reached a 90-day deal to lower tariffs on each other's imports. US taxes on Chinese imports will drop to 30 percent from 145 percent previously, while China's tariffs on US imports will drop to 10 percent from 125 percent earlier. Beyond the major indices, 10 companies finished the week stronger, booking double-digit gains during the day. In this article, we name Monday's 10 top performers and detail the reasons behind their strong performance. To come up with the list, we considered only the stocks with a $2-billion market capitalization and $5-million trading volume. An enthusiastic customer completing a purchase and receiving an order confirmation via one of the companies online sales channels. Shopify Inc. saw its share prices jump as high as 15.85 percent at intra-day trading on Monday before ending the day just up by 13.70 percent at $104.34 apiece, as investors cheered news of its inclusion in the Nasdaq 100. Last week, Nasdaq announced that Shopify Inc. (NASDAQ:SHOP) will replace software company MongoDB Inc. on the Nasdaq 100 beginning May 19. The announcement followed the release of a strong earnings performance in the first quarter of the year. During the period, Shopify Inc. (NASDAQ:SHOP) said net income, excluding the impact of equity investments, increased by 56 percent to $226 million from $144 million in the same period last year, as revenues rose by 26.8 percent to $2.36 billion from $1.86 billion year-on-year. Shopify Inc. (NASDAQ:SHOP) said that the strong figures marked its eighth consecutive quarter of pro forma revenue growth and seventh straight quarter of GMV growth. 'We built Shopify for times like these. We handle the complexity so merchants can focus on their customers. We ship products faster than anyone else, giving merchants the edge they need to succeed,' said President Harley Finkelstein. Overall, SHOP ranks 10th on our list of stocks that soared by double digits today. While we acknowledge the potential of SHOP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SHOP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
13-05-2025
- Business
- Yahoo
Why Shopify Inc. (SHOP) Soared Today
We recently published a list of . In this article, we are going to take a look at where Shopify Inc. (NASDAQ:SHOP) stands against other stocks that soared by double digits today. The stock market kicked off the trading week brimming with optimism after the US and China announced a tariff truce on each other's goods. The tech-heavy Nasdaq booked the largest gains among the three major indices, rallying 4.85 percent. The S&P 500 followed with a 3.26-percent increase, and the Dow Jones, with 2.81 percent. Over the weekend, the US and China reached a 90-day deal to lower tariffs on each other's imports. US taxes on Chinese imports will drop to 30 percent from 145 percent previously, while China's tariffs on US imports will drop to 10 percent from 125 percent earlier. Beyond the major indices, 10 companies finished the week stronger, booking double-digit gains during the day. In this article, we name Monday's 10 top performers and detail the reasons behind their strong performance. To come up with the list, we considered only the stocks with a $2-billion market capitalization and $5-million trading volume. An enthusiastic customer completing a purchase and receiving an order confirmation via one of the companies online sales channels. Shopify Inc. saw its share prices jump as high as 15.85 percent at intra-day trading on Monday before ending the day just up by 13.70 percent at $104.34 apiece, as investors cheered news of its inclusion in the Nasdaq 100. Last week, Nasdaq announced that Shopify Inc. (NASDAQ:SHOP) will replace software company MongoDB Inc. on the Nasdaq 100 beginning May 19. The announcement followed the release of a strong earnings performance in the first quarter of the year. During the period, Shopify Inc. (NASDAQ:SHOP) said net income, excluding the impact of equity investments, increased by 56 percent to $226 million from $144 million in the same period last year, as revenues rose by 26.8 percent to $2.36 billion from $1.86 billion year-on-year. Shopify Inc. (NASDAQ:SHOP) said that the strong figures marked its eighth consecutive quarter of pro forma revenue growth and seventh straight quarter of GMV growth. 'We built Shopify for times like these. We handle the complexity so merchants can focus on their customers. We ship products faster than anyone else, giving merchants the edge they need to succeed,' said President Harley Finkelstein. Overall, SHOP ranks 10th on our list of stocks that soared by double digits today. While we acknowledge the potential of SHOP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SHOP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-05-2025
- Business
- Yahoo
Shopify's Nasdaq-100 Leap: Could This Be the Turning Point for Investors?
Shopify (NASDAQ:SHOP) is gearing up to join the Nasdaq-100 on May 19, replacing MongoDB a move that could open the floodgates for institutional investment. The news propelled Shopify's stock up nearly 15% at 2.44pm in a single trading day, driven by a 27% revenue surge in its latest earnings report, despite ongoing trade friction between Canada and the US. Shopify President Harley Finkelstein told investors that, as of April, the company is seeing minimal impact from tariff pressures. Warning! GuruFocus has detected 4 Warning Signs with SHOP. But the financial chart tells a more nuanced story. While revenue continues to trend upward, net income has been a rollercoaster, fluctuating between profitability and losses. EBITDA, meanwhile, remains relatively stable, suggesting Shopify is managing operational costs effectively despite market volatility. The overall trend points to expanding revenue streams, supported by Shopify's ongoing push into AI a strategy that could bolster its top line in the coming quarters. With Shopify's Nasdaq-100 inclusion just days away, investors might want to keep an eye on ETF inflows and institutional buying. The stock's momentum could intensify, but the real test will be whether Shopify can convert increased exposure into sustained profitability. Stay locked in for more insights and updates on this evolving story. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-05-2025
- Business
- Yahoo
Shopify seeing 'little evidence' of tariffs sparking slowdown for merchants
Shopify Inc.'s executives say even though businesses are shaking up their operations to cope with a global trade war, their company has yet to notice the unrest putting a damper on commerce. The Ottawa-based technology firm has been monitoring for potential slowdowns stemming from tariffs but numbers for April "show little evidence of that," president Harley Finkelstein said Thursday. Despite the comfort in the numbers, businesses using the e-commerce software his company sells aren't leaving anything to chance. "Merchants are considering when to change sourcing countries, when to buy inventory, or even adjusting product mix in their catalogues," chief financial officer Jeff Hoffmeister told a conference call with analysts to discuss the company's latest results. Hiking what they charge customers has figured into some merchants' strategies, but Hoffmeister said, "we haven't seen broad-based price increases yet." The myriad of coping mechanisms have been prompted by U.S. President Donald Trump who's spent much of the year threatening tariffs, only for some to be walked back and others to by applied with no warning or at rates that are different from what he promised. His unpredictable nature has become a scourge for business owners scrambling to keep up with duties that could upend or kill their business. Shopify is seen as a barometer of how companies are faring because its software powers a wide swath of the world's businesses, including footwear brand Birkenstock, handbag makers Kate Spade and Coach and fashion houses like Lilly Pulitzer. Finkelstein said his company's quarterly growth is showing promising signs, even if the overall business posted a net loss. Shopify reported a first-quarter net loss of US$682 million compared with a loss of US$273 million in the same quarter last year as its revenue rose 27 per cent. The e-commerce technology firm, which keeps its books in U.S. dollars, said the loss amounted to 53 cents US per diluted share for the quarter ended March 31 compared with a loss of 21 cents US per diluted share a year earlier. Its net income excluding the impact of its equity investments amounted to US$226 million for its latest quarter, up from US$144 million a year ago. Revenue totalled US$2.36 billion for the quarter, up from US$1.86 billion in the same quarter last year. Subscription solutions revenue amounted to US$620 million, up from US$511 million a year ago, while merchant solutions revenue amounted to US$1.74 billion, up from US$1.35 billion. In its outlook for its second quarter, Shopify said it expects revenue to grow at a mid-twenties percentage rate on a year-over-year basis. Operating expenses as a percentage of revenue are expected to be 39 to 40 per cent. Shopify spent much of the quarter tweaking its product offerings to help merchants navigate trade tensions. Some of the changes help merchants comply with new tariffs within hours of them being announced and then make it easier to calculate what international customers will pay. "We've shipped a lot and we've focused on areas that we can have a more immediate impact, cross-border trade, making it easier to buy local, do these calculations, and shipping," Finkelstein said. He teased that "this is just the beginning." Later this month, the company will introduce duty inclusive pricing, helping customers avoid surprise fees at checkout. This report by The Canadian Press was first published May 8, 2025. Companies in this story: (TSX:SHOP) Tara Deschamps, The Canadian Press
