Shopify stock slides 16% despite upbeat quarterly results

Shopify (SHOP.US) stock plunged over 16.0% on Thursday after weak Q1 financial guidance overshadowed better than expected Q4 results.

• EPS (non-GAAP): $0.07 vs analyst estimates of -$0.02 ($0.09 beat)

• Revenue rose 26%YoY to $1.7 billion, above market estimates of $1.65 billion. 

Shopify's revenue growth has been very steady in recent years. Source: Barchart

• Free cash flow of $247.8 million, up from negative free cash flow of $228 million in previous quarter

• Gross Margin (GAAP) fell to 46.0% from 50.1% same quarter last year

Shopify's gross profit margin, an important metric measuring how much money there is left after paying for servers, licenses, technical support and other necessary running expenses, was at 46% in the latest quarter. This metric has been on a downward trend through 2022. Source: Barchart

Key takeaways from Shopify's Q4 results. Source: AlphaStreet

• CEO Tobias Lütke said Shopify remained on course for steady move toward profits.

• For the first quarter of 2023, the e-commerce platform forecasts revenue growth in the "high teens," while analysts expected over 20% revenue growth.

• "We believe that the revenue guide implies that Q1 gross merchandise volume will be weaker than expected," Jefferies analyst Samad Samana said in a note to clients. "Management did note the uncertain macro (economy) was factored into the outlook."

Shopify (SHOP.US) stock launched today's session with a bearish price gap and if current sentiment prevails sell-off may deepen towards crucial support at $43.05, which is marked with lower limit of the 1:1 structure and 38.2% Fibonacci retracement of the last upward wave. Source: xStation5