Shopify's Soaring Stock Sends Canada's Benchmark Index to Record Highs
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Shopify shares surged as much as 25% on Tuesday, pushing Canada's benchmark stock index, the S&P/TSX Composite Index, to a record high of nearly 25,025, reports Markets Insider. The e-commerce giant, which provides software for online storefronts, holds the most weight of any stock on the index, and its gains have significantly boosted the Canadian market.
The surge in Shopify's stock price followed the company's strong earnings report, which surpassed revenue estimates and provided a promising outlook for the holiday season. Shopify reported earnings per share of $0.35, exceeding forecasts of $0.26 according to LSEG estimates. Revenue came in at $2.16 billion, beating estimates of $2.12 billion.
The company anticipates revenue growth in the mid- to high-twenties percentage for the current quarter, surpassing forecasts of around 23% according to FactSet. This optimistic outlook reflects confidence in holiday spending.
Shopify president Harley Finkelstein attributed the company's strong performance to its increasing market share among e-commerce companies. He highlighted the growing number of key retailers, including Reebok, Hanes, and Vera Bradley, who have chosen Shopify as their platform.
"Shopify is increasingly the go-to platform of choice, not just for entrepreneurship, but for all of commerce. We are well positioned for extensive growth across different merchant segments, size, geographies, channels and products," Finkelstein said on a call with investors.
Shopify is also making strides in incorporating new technology, launching an AI assistant and AI-powered tools for merchants.
Analysts from Citi have expressed a bullish outlook for Shopify stock, citing a large addressable market, secular tailwinds, and large-scale growth.
The latest earnings report further fuels Shopify's already impressive stock performance, which has seen a rise of over 43% this year. Canada's benchmark index has also experienced a significant surge, gaining over 19% in 2024.