Shopify is one of the best platforms for starting an e-commerce store, as it is an end-to-end solution for everything and takes care of payment. Recently, we covered that Shopify is experimenting with delivery and has an investment in a company. It looks like these announcements were not enough, as Shopify stocks have gone through one of their worst-ever days in the stock market. Shopify’s stocks fell because of its earnings call delivered earlier this week, where executives declined to provide any forecast beyond the current period, leading to its stock going down as much as 16% in day trading.
It is being said that investors were not happy and clear about the data provided to them in the earnings call, with most suggesting that the numbers meant an operating loss even when adjusted based on the new price increase. Also, the fact that no forecast was provided for the next quarter meant that investors weren’t sure how the company’s growth would look in the coming months. Apart from that, there was a problem with the data executives didn’t want to share apart from forecasting its future growth. The company said they will no longer provide merchant count, which means you won’t know how many customers Shopify has from now on.
One analyst wrote, “Unfortunately, investors should not expect incremental transparency going forward as Shopify will no longer disclose merchant count, even as international growth becomes increasingly important,”. Another wrote, “Many investors had been expecting more explicit FY23 guide/commentary on [operating income] profitability, which we didn’t get,”. While the stocks were down, Shopify’s image in the Wall Street is still good and majority of them upgraded the stock while a few analysts did downgrade the stock based on the numbers that were provided.
However, it is also worth noting that Shopify managed to match the expectations that were set for the holiday season, and it is also expected that 2023 is going to be a challenging year for businesses all over the world due to the looming recession fears all around the world. On top of that, we have the Russia-Ukraine war and the US-China tensions playing a part in international trade and crude oil prices that could lead to further disruption.