Shopify Earnings Are Coming. Can They Keep the Stock’s Rally Going?

Shopify stock has been on a roll over the past quarter. Will the e-commerce platform’s third-quarter earnings report, due Tuesday morning, keep the streak going—or reverse its gains?

Shares of Shopify are up 16% this year.

Shopify stock has gained 44% since its second-quarter earnings report in early August, compared with a roughly 9% gain in the S&P 500.

“SHOP seemed priced for perfection, which in our eyes, creates more downside risk than upside risk into the print,” writes Reginald Smith, an analyst at J.P. Morgan, in a research note Monday.

Analysts expect Shopify to post adjusted earnings of 27 cents a share on $2.1 billion in revenue, according to FactSet.

For Shopify stock to rally following earnings, Smith says he believes the company needs to show that revenue and order volume grew by more than 20% from last year—a pace that seems feasible given Shopify’s sales have been rising by double-digit percentages over the past few quarters. That, however, would set a high bar for the company to beat going forward, he adds.

This isn’t the first time investors have questioned whether Shopify can sustain such high revenue growth rates. The stock took a nosedive in May after the company warned the sale of its logistics business would weigh on second-quarter revenue growth. Shopify’s final results for the second quarter assuaged some of those concerns, with sales growing by 20% year over year.

“We continue to contend that Shopify’s growth will be driven more from sustainable [gross merchandise value] growth in the high-teens to low-20s as Shopify expands its addressable market with Enterprise, [point of sale] and B2B offerings,” writes Bhavin Shah, an analyst at Deutsche Bank, who rates the stock a Buy.

Analysts also see better margins ahead. Earlier this year, the company’s profitability took a hit from its need to invest in more marketing initiatives. These efforts will likely continue throughout 2025, notes Citi analyst Tyler Radke, but could be offset by reduced spending on “core expenses.”

Radke has a Buy rating on the stock but acknowledges it’s a high-risk idea. Recent purchasing data for e-commerce suggests demand has softened a bit, meaning the company will have to fuel its revenue growth by continuing to nab market share from competitors. Bulls are optimistic that it can.

Earnings might be just the ticket to prove it.