Today, investors in Shopify (NYSE:SHOP) are smiling in delight after the stock soared higher by 9%. However, the seeming lack of specific news related to this price action has left some SHOP stock investors scratching their heads.
So, what is boosting SHOP stock today? From strong Q3 earnings last month to an e-commerce rivalry and plenty of social media chatter, there are many reasons for Shopify investors to be smiling today. Let’s take a look.
SHOP Stock Q3 Earnings Highlights
Shopify reported Q3 revenue of $1.12 billion, up 46% year-over-year (YoY). The revenue figure missed estimates by 2.3%. However, investors didn’t seem to be concerned; SHOP stock is up 11% since reporting earnings on Oct. 28.
Cumulative gross-merchandising volume (GMV) surged to $400 billion in Q3. Shopify President Harvey Finkelstein noted that “It took 15 years for our merchants to get to $200 billion in cumulative GMV, and just 16 months to double that to $400 billion.”
Shopify received a direct benefit from the Covid-19 pandemic as shoppers flocked to buy items online instead of in-store. It’s extremely impressive that Shopify has managed to still grow their GMV and sales at a high rate, even as the re-opening theme plays on.
Shopify rolled out several new features during Q3. Shopify Markets was released, which simplified cross-border e-commerce for its users. Merchants can enter new markets using Shopify’s centralized platform without having to worry about currency conversions, language barriers and more.
Shopify also released Shopify Balance, which offers users a no-fee money management platform, a spending card and cash-back rewards. Additionally, Shopify partnered with TikTok, allowing merchants already on the social media platform to link products directly to their Shopify site.
Shares of SHOP stock are up 49% the past six months and up 48% year-t0-date (YTD), outperforming the S&P 500 in both timeframes.
E-commerce Rivals: Shopify vs. Amazon
Few things get investors more excited than a good rivalry. During Q2, monthly unique traffic to Shopify affiliates surpassed unique monthly traffic visits to e-commerce giant Amazon (NASDAQ:AMZN). That’s a huge achievement.
According to SimilarWeb, Shopify received 1.16 billion average monthly unique users during Q2, compared to Amazon’s 1.10 billion. The data does not include non-retail Amazon websites, such as Prime Video or Amazon music. Still, this is a huge milestone for Shopify as it works to encroach on Amazon’s massive market share.
Ed Lavery, SimilarWeb’s director of investor solutions, stated, “This is the first time we’re seeing that Amazon has a strong competitor in terms of reach. Amazon now has a significant competitor out there.”
What Are Investors Saying About SHOP Stock?
$SHOP Pivot Points
The little SMB software shorted by many now carries a $200B market cap and still seeing 40% revenue growth.
What a beauty. https://t.co/iVYIMMl9nO
— Ophir Gottlieb (@OphirGottlieb) November 12, 2021
$SHOP Beast mode
— Scott (@livetradepro) November 12, 2021
I'm feeling very good about my $TDOC sale to buy $SHOP.
— BahamaBen (@BahamaBen9) November 12, 2021
$SHOP is going back to July ATH 🚀 pic.twitter.com/X4u5DdIApk
— Te Sheng Lin 🦃🇺🇸 (@teshen8lin) November 12, 2021
$SHOP @Shopify is one of those companies that you can forget about, and without a doubt, they will keep growing. Amongst a massive bubble market of insane valuations, I think Shopify is still a great long term add. (Of course subject to market conditions short-mid term) #stocks pic.twitter.com/FeFzqb6vqs
— ¶ Lieutenant Ghost Trades ▲ (@ImLtGhost) November 12, 2021
On the date of publication, Eddie Pan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
