Trading Shopify After Q1 Fiscal 2024 Performance

July 10, 2024 22:11

Shopify is a Canadian multinational e-commerce company which provides essential infrastructure for online stores and retail point-of-sale systems. Headquartered in Ontario, Canada it was founded in 2006 and has over 8,000 employees. Its e-commerce platforms allow anyone to start, manage and grow an online business.  

Learn more about Shopify's fiscal first-quarter 2024 performance and what analysts are forecasting for the stock below.

Stock: Shopify Inc.
Symbol for Invest.MT5 Account: SHOP
Date of Idea: 9 July 2024
Time Line: 1 - 6 months
Entry Level: $69.00
Target Level: $96.00
Position Size for Invest.MT5 Account: Max 5%
Risk: High
  • The Invest.MT5 account allows you to buy real stocks and shares from some of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.

Shopify Fiscal Q1 2024 Performance

Here are some of the key highlights from the fiscal first-quarter 2024 earnings report from Shopify: 

  • Earnings of 20 cents per share vs 17 cents expected, excluding one-time charges 
  • 21 cents a share loss with one-time charges included vs 9 cents a share expected 
  • Gross merchandise volume (GMW) of 23% to $60.9 billion, up over $11.3 billion over the first quarter of 2023 
  • Merchant solutions revenue up 20% to $1.4 billion compared to the prior year 
  • Gross payments volume (GPV) of $36.2 billion, up from $27.5 billion from the first quarter of 2023 

On the face of it, Shopify beat analyst forecasts on most metrics, apart from the impact of its one-time charge. The loss came from a series of expenses which included new marketing initiatives. The stock sold off aggressively after the surprise loss, recording its biggest one-day drop on record of 20%. The move was also influenced by warnings that its logistics business would weigh on its second-quarter sales growth.  

Shopify did report positive gross merchandise volume numbers which helped drive its revenue up for the quarter. Its subscriptions also rose and beat market expectations. The combination of price increases and rising merchant growth helped to lift its earnings, excluding one-time charges.  

The second quarter forecasts include a rise in revenue to a high-teens percentage but translate into a year-over-year growth rate in the low to mid-twenties when adjusting for the impact of the sale of their logistics business.  

Another concern is the fact the one-time charges are from increased expenses. Competitors have been trying to cut down on expenses to drive higher profit margins whereas Shopify's have increased. This can be an issue during an economic downturn as the company and a high failure rate of startup businesses.  

The uncertainty is reflected in analyst ratings which are now mixed, as shown below.

Shopify Stock Forecast - What do the Analysts Say?

According to analysts polled by TipRanks for an Shopify stock forecast in the past 3 months, there are currently 17 buy, 14 hold and 0 sell ratings on the stock. The highest price level for a Shopify stock forecast is $96.00 with the lowest price target at $69.00. 

The average price target for a Shopify stock forecast is $76.60.

Source: TipRanks, 9 July 2024


An Example Trading Idea for the Shopify Stock Price

An example trading idea for the Shopify share price could be as follows:  

  • Buy the stock on a break above $69.00 to allow for volatility. 
  • Target just below the highest analyst price target of $96.00. 
  • Keep your risk small at a maximum of 5% of your total account.   
  • Time Line = 1 – 6 months  
  • If you buy 10 Shopify shares:  
    • If target is reached = $270.00 potential profit [($96.00 - $69.00) * 10 shares].

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially as the company's revenues are highly correlated to the economic cycle.

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in Shopify stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.

However, there is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall.

How to Buy Shopify Stock in 4 Steps  

With Admirals, you can buy shares with a commission of just $0.02 per share and a low minimum commission of just $1 on US stocks. 

  1. Open an account with Admirals to access the dashboard.   
  2. Click on Trade on one of your live or demo accounts to open the web platform.   
  3. Search for your stock in the search window at the top right to view the live price chart. 
  4. Click Create New Order from the bottom of the screen to open the trading ticket. 
Source: Admirals MetaTrader 5. Shopify. Monthly. Date: January 2016 to July 2024, captured on 9 July 2024. Past performance is not a reliable indicator of future results or future performance.


Click on the banner below to trade Shopify stock today ▼▼▼ 

Do You See the Shopify Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.

If you believe there is a higher chance Shopify share price will move lower, then you can also trade short from a CFD trading account which Admirals also provide.

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.

This means you can trade long and short to potentially profit from rising and falling stock prices.


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Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.