Stuffsearth.com — Shares in Shopify (NYSE:) shed nearly a fifth of their value in early U.S. trading Wednesday after the company issued a downbeat current-quarter revenue forecast.
The Canada-based e-commerce platform has been hit by a series of headwinds, including more cost-conscious customers and stubborn inflationary pressures that have weighed on its clientele of small- and medium-sized businesses.
In the first quarter, Shopify posted earnings per share of $0.20, surpassing analysts’ estimates of $0.17. The company’s revenue reached $1.9 billion, also above the consensus projections of $1.84 billion.
“[W]e think investors may be disappointed despite a solid quarter on the surface,” analysts at Jefferies said in a note to clients, adding that the company’s top-line outperformance was “modest.”
Shopify anticipates that second-quarter revenue growth will be in the high teens year-over-year, translating to a growth rate in the low-to-mid twenties after adjusting for a 300- to 400-basis point impact from the sale of its logistics businesses to freight forwarder Flexport. Investors have seen average revenue growth of roughly 26% in recent quarters.
Vahid Karaahmetovic contributed to this report.
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