Shopify Q3 Earnings Preview: Make or Break Report After Big Price Drop
Shopify Q3 Earnings Preview: Make or Break Report After Big Price Drop
Shopify needs impressive Q3 numbers as its share price falls
- Analysts expect EPS of $0.15 on an adjusted basis.
- Shopify beat revenue expectations in five of the last eight quarters.
- An AI-enabled suite of features will grab attention.
Shopify (SHOP) is scheduled to report third-quarter fiscal results on Thursday, Nov. 2 before the market opens. It will hold a management conference call at 8:30 a.m. eastern time (ET), according to a press release from Shopify.
Analysts expect to see earnings per share (EPS) of $0.15 on an adjusted basis and $0.05 on a GAAP basis. Revenue is seen crossing the wires at $1.67 billion with an adjusted net income of $178.54 million. Shopify beat revenue expectations in five of the last eight quarters, according to Bloomberg data.
Those numbers would represent modest growth from a year ago, when the e-commerce company posted EPS and revenue of -$0.02 and $1.36 billion, respectively. However, investors will also be keyed into the numbers on gross merchandise volume (GMV), which increased 17% to $55 billion.
Investors will eye Shopify's AI suite
Also on investors’ minds will be the recently launched Shopify Magic and SideKick, an AI-enabled suite of features on the platform aimed to help merchants with their businesses and increase productivity and workflows.
In the last quarterly update, management guidance said the company expected Q3 revenue growth in the low twenty-percentile range year-over-year and gross margin expansion of two to three percentage points from Q2, when gross margin came in at 49.3%.
Currently, analysts are mixed on their ratings, with 24 buys, 26 holds and 2 sells, according to Bloomberg. A 12-month target price of 66.81 is assigned against the current prices of 46.28. We should see several changes to those ratings in the weeks following the earnings results.
Trading SHOP earnings
SHOP is trading with an implied volatility rank (IVR) of 62.1 as of Friday, Oct. 27. That comes amid a monthly decline of over 15% in the stock price for October following a 17.93% decline in September. A broader pullback in equity prices isn't helping.
The closest expiration following earnings is the November 3 expiry, which shows an expected move of nearly five points at an implied volatility of 101.5%. However, later expirations, such as the November 15 expiry still offers some juicy premiums.
After the big monthly declines, traders may be looking at taking a shot at going long if they expect rosy earnings numbers. But, if you expect the stock price to stay within the expected move, a long-butterfly trade could also work for the earnings announcement.
In this case you would want to set your long puts at five points or more outside of the current price. For instance, buying the 40 and 52 puts while selling a put at the money. The debit paid is your max loss.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2025 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.