Shopify's 25% gain sends Canada's benchmark stock index to all-time highs
AP/Denis Poroy
- Shopify's stock popped 25% on Tuesday after reporting strong revenue and a promising holiday outlook.
- The gains added fuel to Canada's stock rally, helping the market touch record highs.
- The e-commerce giant holds the most weight of any stock on Canada's benchmark index.
Shopify shares soared Tuesday, lifting Canda's benchmark stock index.
Shares of the e-commerce firm popped as much as 25% after reporting revenue that beat estimates and giving strong guidance for the holiday season.
With the heaviest weighting on Canada's benchmark index, Shopify's gains pushed the S&P/TSX Composite Index up as much as 1% on Tuesday to touch nearly 25,025, marking the first time the index has crossed the 25,000 threshold.
The company, which builds software to power online storefronts, reported earnings per share of $0.35, beating forecasts of $0.26 according to LSEG estimates. Revenue, meanwhile, came in at $2.16 billion versus estimates of $2.12 billion.
Going forward, the company says it expects revenue growth in the mid- to high-twenties percentage for the present quarter, above forecasts of around 23% according to FactSet. The strong outlook shows optimism around spending in the upcoming holiday season.
Shopify president Harley Finkelstein said the company's strong beat shows it's gaining market share among e-commerce companies. He said the company has attracted an increasing number of key retailers like Reebok, Hanes, and Vera Bradley.
"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.
The company is also making headway in incorporating new technology, launching an AI assistant and AI-powered tools for merchants.
Analysts from Citi said they have a bullish outlook for the stock, citing a large addressable market, secular tailwinds, and large-scale growth.
The latest earnings add fuel to what has already been a hot streak for Shopify stock, which is up over 43% this year. Canada's benchmark index has soared over 19% in 2024.