Shopify stock plunged Thursday as March-quarter earnings, revenue and gross merchandise volume missed analyst estimates. The e-commerce firm announced the acquisition of fulfillment operator Deliverr for $2.1 billion.
Canada-based Shopify reported first-quarter earnings before the market open on Thursday. Shopify stock plunged 14.9% to close at 413.09 on the stock market today.
For the quarter ending March 31, Shopify earnings came in at 20 cents per share on an adjusted basis, down 90% from the year-earlier period. Revenue for SHOP stock rose 22% to $1.2 billion, the company said.
Shopify Stock: Tough Year-Over-Year Comparisons
Revenue growth decelerated for a fourth straight quarter. Analysts lowered expectations coming into the March quarter amid the coronavirus pandemic fading and e-commerce growth normalizing.
"While investors were braced for a shortfall, particularly after weakness at other e-commerce companies, SHOP's Q1 still fell short of the lowered bar," Jefferies analyst Samad Samana said in a note to clients.
Shopify is building a U.S. distribution network to store and ship products for its merchant customers. The $2.1 billion deal for Deliverr is structured as 80% cash, 20% equity.
"SHOP expects the deal to be accretive to revenue growth in 2022, slightly dilutive to adjusted gross profit margin, and dilutive to adjusted operating margin," Truist analyst Terry Tillman said in his note to clients.
SHOP Stock: Gross Merchandise Volume Light
For the first quarter, analysts expected Shopify earnings of 64 cents a share on revenue of $1.25 billion. A year earlier, Shopify earned $2.01 per share on revenue of $989 million.
Gross merchandise volume from merchant customers came in at $43.2 billion vs. estimates of $45.84 billion.
Heading into the Shopify earnings report, the e-commerce stock had retreated 66% in 2022.
Shopify sets up e-commerce websites for small businesses, and partners with others to handle digital payments and shipping.
Also, SHOP stock had a Relative Strength Rating of 4 out of a possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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