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Analysts Have Made A Financial Statement On Shopify Inc.'s (NASDAQ:SHOP) Third-Quarter Report
It's been a mediocre week for Shopify Inc. (NASDAQ:SHOP) shareholders, with the stock dropping 14% to US$144 in the week since its latest third-quarter results. Shopify reported in line with analyst predictions, delivering revenues of US$3.7b and statutory earnings per share of US$0.36, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Shopify's 48 analysts is for revenues of US$19.3b in 2027. This reflects a sizeable 37% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 27% to US$2.11. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$19.2b and earnings per share (EPS) of US$2.07 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
View our latest analysis for Shopify
The analysts reconfirmed their price target of US$177, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Shopify analyst has a price target of US$220 per share, while the most pessimistic values it at US$120. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Shopify's growth to accelerate, with the forecast 28% annualised growth to the end of 2027 ranking favourably alongside historical growth of 23% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Shopify is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$177, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Shopify going out to 2028, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Shopify that you need to take into consideration.
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