Shopify's Revenue Growth Slows in Q1 2024, Affecting Partner Affirm

Shopify reports 23% revenue growth in Q1 2024, missing expectations, and forecasts high-teens percentage growth for Q2. The company's stock dips, affecting partner Affirm, amid concerns over e-commerce and Buy Now, Pay Later market trends.

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Shopify's Revenue Growth Slows in Q1 2024, Affecting Partner Affirm

Shopify's Revenue Growth Slows in Q1 2024, Affecting Partner Affirm

Shopify, the leading e-commerce platform, reported slower-than-expected revenue growth of 23% in the first quarter of 2024. The company's muted forecast for the second quarter, projecting a high-teens percentage growth rate, has raised concerns among investors and analysts. As a result, Shopify's Stock, Earnings, Buy price experienced a dip following the earnings release.

Why this matters: The slowdown in Shopify's growth has significant implications for the broader e-commerce industry, as it may indicate a shift in consumer spending habits and a potential plateau in online shopping growth. This could have far-reaching consequences for retailers, investors, and the overall economy.

The e-commerce giant's revenue for Q1 2024 reached $1.9 billion, marking a 23% increase from the same quarter last year. Despite this growth, the company's return to net losses and lower revenue growth forecast for Q2 have left investors questioning the future trajectory of Shopify's business.

Shopify's earnings report also had a ripple effect on its partner, Affirm, a leading Buy Now, Pay Later (BNPL) provider. Affirm's stock price dipped over 6% amid concerns over the broader e-commerce and BNPL market trends. The slowdown in Shopify's growth has raised questions about the sustainability of the rapid expansion seen in these sectors in recent years.

cuts, price, target Robert W. Baird cut Shopify's target price from $87.00 to $77.00 while maintaining an outperform rating on the stock. Several other research analysts have also issued reports on Shopify, with consensus ratings ranging from hold to outperform and price targets averaging around $76.86.

Shopify's stock opened at $58.94 on Thursday, with a 12-month low of $45.50 and a 12-month high of $91.57. The company reported $0.26 earnings per share for the quarter, beating the consensus estimate of $0.22 by $0.04. Shopify's revenue of $2.14 billion for the quarter also surpassed the consensus estimate of $2.07 billion.

As Shopify navigates this period of slower growth, investors are closely monitoring the company's ability to adapt to evolving market conditions and maintain its position as a leading e-commerce platform. The impact of Shopify's performance on its partners, such as Affirm, highlights the interconnectedness of the e-commerce ecosystem and the challenges faced by companies in this rapidly changing landscape.

Key Takeaways

  • Shopify's Q1 2024 revenue growth slows to 23%, below expectations.
  • Company forecasts high-teens percentage growth for Q2, sparking investor concerns.
  • Shopify's stock price dips, with a 12-month low of $45.50 and high of $91.57.
  • Partner Affirm's stock price also falls 6% amid e-commerce market concerns.
  • Analysts cut Shopify's target price, with consensus ratings ranging from hold to outperform.