Shopify Stock Hits ATH as Company Reports Better than Expected Sale Results

On Feb 12, 2020 at 7:19 pm UTC by Steve Muchoki · 3 min read
Shopify Stock Hits ATH as Company Reports Better than Expected Sale Results
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Shopify reported a much better than expected full-year results. Shopify (SHOP) stock has jumped more than 10% and reached its ATH.

Canadian based e-commerce company, Shopify Inc. has reported a better than expected full-year revenue and sale results. According to the company, the expected quarterly earnings from the holiday sales increased reciprocating to higher profits.

Shopify’s Revenue Report

Shopify (SHOP) stock leaped higher as a result of the news, breaking the initial resistance zone at $500 per share. Trading at $552.23, the company has seen the shares hit an all-time high after rising steadily in the last few months. 

In addition to that, the gross merchandise volume increased to 47% around $20.6 billion in the fourth quarter, hence beating the forecast set at $20.03 billion. The Ottawa based company posted a net income of around $771,000 compared with the net loss of around $1.5 million at the same time last year.

According to the report, the company’s total revenue reported was $505.2 million surpassing the forecasted estimate of $482.5 million. On the other hand, the company reported total revenue of over $2.9 billion during the past black Friday and Cyber Monday, which was an increase from the data reported during the previous year’s sales.

Reasons for Shopify Excellent Results

The huge company’s success is attributed to the efforts made in the last few years by the management to strengthen the delivery network in order to satisfy the customers in a wider market. Although competing with the neighboring giants like Amazon and eBay, the company has penetrated the market considerably. With the customer satisfaction rate increasing by the day and delivery, it only means the company has the goodwill to succeed.

According to the report by the company, last year it invested $1 billion in building a stronger team that would aid in sales delivery. The company has also invested heavily in the latest warehouse technology whereby, it even acquired the warehouse tech provider 6 River System that deals with robotics and other machines for about $450 million. 

Furthermore, the company is working not only as an e-commerce provider but also venturing in a warehouse robotics business. In addition, the company is working on easy delivery via a fulfillment center.

According to the company, although there are disruptions in most parts of the world due to the coronavirus outbreak, it has not crippled its operation to impact the revenue in a significant manner. According to the Chief Financial Officer Amy Shapero, the company is monitoring the ongoing coronavirus outbreak and the possible effect on the business if the spread continues.

Despite the positive results, Shopify will have to do a much bigger marketing strategy in order to compete with Amazon that is doing well in the market and stock wise. 

Business, Indices, Markets, News
Steve Muchoki
Author: Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery!

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