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Shopify Posts Strong Quarter, Warns of Post-Pandemic Lull

The e-commerce platform looks ahead after a monster quarter.
(Burdun Iliya)
(Burdun Iliya)
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Shopify recorded impressive cost when it published its quarterly earnings Wednesday, The Information reports.

Why It Matters: “It has been a killer year for Shopify, buoyed by legions of homebound consumers.” The pandemic’s effect on e-commerce platforms cannot be understated — online shopping grew at an astonishing pace in 2020 as demand skyrocketed.

Numbers To Consider:

  1. Shopify’s yearly revenue hit $2.93 billion in 2020, an 86% increase.
  2. Its Q4 revenue also blew past expectations, landing at $978 million. It was a 94% increase from the year-ago period.
  3. Growth merchandise volume, or the sales flowing through the Shopify platform, exploded to $41.1 billion, double what it was in Q4 2019.

Still, there are concerns about how Shopify will perform when the world eases away from the pandemic norms.

  • Shares fell 3.3% to $1,425 on Wednesday as “investors worried over the company’s future in a post-pandemic world.”
  • Shopify hasn’t released guidance on earnings for 2021 but did acknowledge that its growth will probably slow as consumers return to stores.

Justin Oh:

When the tide eventually goes out on this growth stock wave, I fully expect Shopify ($SHOP) stock to have been swimming a naked.

At $1,408 per share, $SHOP stock is trading at a $166 billion valuation. That’s 42.8x forward sales, 82.3x forward Gross Profit, and 336.2x forward EBITDA on analyst estimates (which, admittedly look low and probably assume post-pandemic slow down in growth).

Regardless, to put this in perspective, this little company with $3.0 billion in Revenue and $1.5 billion in Gross Profit is now valued higher than: 

  • Qualcomm ($QCOM)
  • Starbucks ($SBUX)
  • Square ($SQ)
  • JD.com ($JD)
  • CVS ($CVS)
  • Airbnb ($ABNB)
  • BP ($BP)
  • Costco ($COST)

Shopify has been, and will continue to be, my primary example of Icarus flying closer and closer to the sun.

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