Can Shopify-Affirm exclusive deal save sinking SHOP stock?

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Can Shopify-Affirm exclusive deal save sinking SHOP stock?

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SHOP stock
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Highlights

  • The Shopify stock was once a top-performing stock in Canada; however, it has declined rapidly over the past few months.
  • In Q1 2022, Shopify's total revenue surged 22% year-over-year (YoY) to US$ 1.2 billion.
  • Shruti Patel, Shopify's Director of Product, said it partnered with Affirm due to its expertise and technology.

California-based financial technology (fintech) company Affirm (NASDAQ:ARFM) announced on May 12 that it has entered into a multi-year extension of its partnership with Shopify, one of the leading e-commerce companies worldwide.

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The exclusive deal between Affirm and Shopify is applicable in the United States. It could help the fintech company cement its position as an exclusive pay-over-time provider for Shop Pay Instalments.

According to the official statement, Shop Pay Instalments were launched in June 2021. They are powered by Affirm in the US and have enabled over 100,000 Shopify merchants to offer their consumers the ability to split their purchases up to US$ 3,000.

Under the deal, Shop Pay Instalments will add Affirm's Adaptive Checkout™ to allow eligible merchants to give optimized payment options in the US.

Shruti Patel, Shopify's Director of Product, said it partnered with Affirm due to its expertise and technology. The company believes that Affirm helps its merchants deliver more flexibility to the buyers.

Can Shopify-Affirm deal help the sinking SHOP Stock?

The Shopify stock was once a top-performing stock in Canada; however, it has declined rapidly over the past few months. According to Refinitiv data, the SHOP stock has declined 79.2 per cent from its 52-week high of C$ 2,228.73 per share on November 19, 2021.

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At the end of the trading session on May 12, the SHOP stock closed at C$ 462.28 apiece. The e-commerce company's stock has dipped 38 per cent in a month and 73.5 per cent year-to-date (YTD).

As per the Relative Strength Index (RSI) value of 33, it appears that the SHOP stock is nearing overselling condition. Shopify stock is bleeding, and it seems that market volatility and other macroeconomic factors are causing a massive dip in the stock price.

Despite the exclusive deal, it seems highly unlikely that it would majorly boost the SHOP stock price. Investors could regain their confidence if recession fears subside over the next few weeks.

Shopify Stock

Bottom line

In Q1 2022, Shopify's total revenue surged 22% year-over-year (YoY) to US$ 1.2 billion. Meanwhile, the monthly recurring revenue was US$ 105.2 million as of March 31, 2022.

Notably, the gross merchandise value registered a two-year compound annual growth rate (CAGR) of 57 per cent and reached US$ 43.2 billion.

The gross profit amounted to US$ 637.6 million in Q1 2022 compared to US$ 558.7 million in Q1 2021. Meanwhile, the company posted a net loss of US$ 1.47 billion compared to a net income of approximately US$ 1.3 billion in Q1 2021.  

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Please note, the above content constitutes a very preliminary observation or view based on digital trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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