Shopify’s stock experiences a decline despite surpassing profit and revenue expectations.
FUNDAMENTAL OVERVIEW:
Shopify posted a quarterly profit and revenue that exceeded expectations, anticipating improved revenue growth for the year.
The multinational e-commerce firm reported a profit of $657 million, or 51 cents per share, marking a turnaround from a loss of $623.7 million or 49 cents per share in the previous year. Adjusted earnings stood at 34 cents per share, surpassing analysts’ expectations of 30 cents per share.
Revenue from subscription solutions surged by 31% to $525 million, fuelled by an uptick in the number of merchants and enhanced pricing. Additionally, monthly recurring revenue climbed by 35% to $149 million as of December 31, reflecting sustained growth across Shopify’s subscription plans.
During the Black Friday Cyber Monday weekend, merchants on the platform achieved a record $9.3 billion in sales, marking a 24% surge compared to the previous year, as reported by the company in November.
Shopify reported that in Q4, the gross merchandise volume from merchant transactions increased by 23% to $75.1 billion, surpassing estimates of $71.53 billion. Additionally, merchant solutions revenue rose by 21% to $1.6 billion, exceeding estimates of $1.57 billion.
SHOPIFY TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Shopify is trading within an up channel.
Shopify is positioned below a5&20 the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 81.11
Immediate support level: 75.81
HOW TO TRADE SHOPIFY
After an upward movement, Shopify encountered resistance and formed a bearish engulfing pattern, leading to a downward shift. Presently, it is trading above its support zone, and a sustained bullish sentiment may indicate a potential for further upward movement.