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Highlights
- Shopify Inc (TSX:SHOP), Canada’s leading ecommerce player, is drawing massive investor attention following release of its fourth-quarter results for fiscal 2021 on Wednesday, February 16.
- Notably, Shopify stocks were down by nearly 17 per cent at 10AM EST on Wednesday.
- Shopify lowered its 2022 revenue growth outlook, saying that it does not expect COVID-led e-commerce growth, which boosted its 2021 revenue, will continue in 2022.
Shopify Inc (TSX:SHOP), Canada’s leading ecommerce player, is drawing massive investor attention following release of its fourth-quarter results for fiscal 2021 on Wednesday, February 16.
Notably, Shopify stocks were down by nearly 17 per cent at 10AM EST on Wednesday.
Let us dive in to find out what is going on with Shopify.
Shopify (TSX: SHOP) Q4 FY2021 results
The e-commerce giant has reported that it saw its revenue grow by 41 per cent year-over-year (YoY) to US$ 1.38 billion in the fourth quarter of fiscal 2021.
As more merchants joined the Shopify platform, its subscription revenue increased by 26 per cent YoY to US$ 351.2 million in Q4 2021.
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Also, its merchant solutions revenue jumped by 47 per cent YoY to US$ 1.02 billion in fourth-quarter 2021. This, the company noted, was mainly due to increased gross merchandise volume (GMV), which surged by 30 per cent YoY to US$ 54.1 billion in Q4 2021.
However, the e-commerce company posted a net loss of US$ 371.3 million in the latest quarter, notably down from its net earnings of US$ 198.8 million a year ago.
Image source: © 2022 Kalkine Media®
Data source: Shopify Inc
Why Shopify stocks could be falling?
Apart from reporting its latest net loss, Shopify has also lowered its 2022 revenue growth outlook. The Canadian tech player said that it does not expect COVID-led e-commerce growth, which boosted its performance in 2021, to continue in 2022.
The company added that “new terms” with app developers and theme partners can also impact its subscription solutions revenue this year.
Further, it said that commercial initiatives, sales and marketing investment could also “gain momentum” this year, impacting its revenue growth.
Shopify Inc stock performance
Ahead of its earnings release, Shopify stock jumped by almost five per cent to close at C$ 1,132.62 apiece on Tuesday.
The e-commerce stock has increased by over 14 per cent from a 52-week low of C$ 990 (January 24).
Bottomline
Investors seem to be moving away from the ecommerce giant after it lowered its top line expectations for fiscal 2022. However, some experts believe that Shopify could still be an opportunity for growth investors in the long run.
Nonetheless, investors should ideally take note of their investment goals and risk appetite before jumping into any investment decision.
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