A 343% increase in the next quarter? Shall we bet on SHOP's EPS Surge?

$Shopify(SHOP)$ the Canadian e-commerce leader, saw its stock rebound by 7% last week following a sharp decline. With its financial report due next week (February 13th), investors are eyeing it as a potential catalyst for further stock price gains.

In 2023, Shopify focused on streamlining operations, shedding non-core assets, and doubling down on e-commerce growth. Cost-cutting measures are set to continue as the company aims to solidify its position as the premier online sales platform in 2024, catering not only to small and medium-sized businesses but also targeting larger enterprise clients.

Shopify's strategic pivot is evident in its acquisition strategy. For every lost customer, it gains 38 enterprise-level clients, each contributing significant annual sales exceeding $125 million. This shift underscores the importance of enterprise customers for Shopify's growth trajectory.

The Shopify Plus platform, designed for enterprise clients, offers robust scalability and customization options, albeit at a higher price point starting at $2,000 per month. Despite this, Shopify Plus contributed $44 million in monthly recurring revenue (MRR) in the third quarter.

Analysts expect Shopify to report earnings of $0.31 per share for the next quarter, representing a remarkable 343% year-over-year increase, with full-year earnings per share forecasted to soar by 1,650%. Such impressive growth projections, coupled with potential guidance revisions, could further bolster investor confidence and drive stock price appreciation.

Historical data from Tiger Trade

While SHOP's valuation may seem lofty, its growth potential remains compelling, particularly with a focus on expanding its enterprise clientele. As Shopify continues to innovate and differentiate itself in the market, supported by its global expansion strategy and anticipated low interest rates, the outlook for future growth appears promising.

Investors eagerly await the upcoming earnings report, anticipating insights into Shopify's performance and future prospects.

Historical data from Tiger Trade