Shopify’s stock saw a significant jump on Tuesday after the e-commerce company reported impressive third-quarter earnings, beating analysts’ expectations. This strong performance was driven largely by growth in its subscription business, with revenue guidance for the upcoming quarters coming in above projections.
For the quarter ending on September 30, Shopify’s net income doubled to $344 million, surpassing the forecasted $332 million. Total revenue for the quarter increased by 26%, reaching $2.16 billion—well above the $2.09 billion predicted by analysts polled by FactSet.
The company’s merchant solutions revenue also rose by 26%, totaling $1.55 billion and exceeding expectations of $1.52 billion. Shopify recently implemented price hikes for its premium services, which are designed to meet the needs of larger businesses. These adjustments, along with the company’s focus on expanding and refining its product offerings, have helped drive impressive growth and contributed to Shopify’s stock surge.
Shopify continues to solidify its position in the e-commerce world, helping small businesses set up online stores and partnering with companies to streamline digital payments and shipping. Recently, Shopify announced expanded partnerships with PayPal (PYPL) and Google’s parent company, Alphabet (GOOGL), specifically with YouTube, creating even more opportunities for merchants to reach and engage customers.
In addition, Shopify made a strategic leadership move in August, bringing on Mikhail Parakhin, a former Microsoft (MSFT) executive, as its new chief technology officer. This hire emphasizes Shopify’s commitment to innovation and advancing its technology.
On the technical front, Shopify’s stock performance is strong. It currently holds a Relative Strength Rating of 82 out of a possible 99, as per IBD Stock Checkup. The Earnings Per Share (EPS) Rating stands at an impressive 98, with an overall Composite Rating also at 98—showing a promising outlook for the stock.
