Shopify Q1 Preview: Analysts Predict Strong Sales Growth

Zinger Key Points
  • Shopify looks poised to beat the Q1 GMV consensus estimate by 2%, one analyst said.
  • The company’s share gains are likely to solidify, as offline outpaces online growth this year, another analyst added.
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Shares of Shopify Inc SHOP were trading lower on Tuesday ahead of the company's first-quarter results, scheduled for May 8.

Here are some key analyst expectations amid an exciting earnings season.

Truist Securities On Shopify

Analyst Terry Tillman maintained a Hold rating and price target of $85.

An analysis of Truist Card Sales Data for the first quarter suggests Shopify could report GMV (gross merchandize value) of $60.7 billion, 2% higher than the current consensus of $59.5 billion, Tillman said in a note. This implies GMV per card would reflect a 19% sequential decline and 23% year-on-year growth, he added.

"This would represent quite solid y/y growth improvement versus 15% reported in 1Q23 and 16% in 1Q22," the analyst stated. "Like last quarter we believe strong GMV upside would likely contribute to upside in both Subscription and Merchant Solutions revenue in 1Q24 and consensus estimates for revenue and non-GAAP operating profit would be anticipated to move higher for the year," he further wrote.

Check out other analyst stock ratings.

Benchmark On Shopify

Analyst Mark Zgutowicz reaffirmed a Hold rating on the stock.

Shopify's first-quarter results could reflect some tailwinds, including "steady GMV gains as higher-income consumer spending holds," which could "comfortably beat consensus by at least 3%," Zgutowicz said. He added that the additional marketing spend of around $25 million could translate to "solidifying share gains as offline outpaces online growth this year."

Other tailwinds include "flow through of February Plus pricing increases to margins and GPV (gross payment volume)" and an improvement in operating leverage through the back half of 2024, the analyst further stated.

SHOP Price Action: Shares of Shopify were down 0.4% to $76.99 at the time of publication Tuesday.

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Posted In: Analyst ColorEarnings MissesReiterationAnalyst RatingsBenchmarkMark ZgutowiczStories That MatterTerry TillmanTruist Securities
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