Shares of Canadian e-commerce giant Shopify (TSX:SHOP) are slumping after the company warned that its growth rate will slow in 2021.
Shopify said that its revenue will not grow as rapidly this year as in 2020, when it increased 86% to $2.93 billion U.S. The company didn’t give guidance on earnings for the current year, a move that disappointed investors and analysts.
Shopify added that the arrival of vaccines could see some consumer spending rotate back to bricks-and-mortar retailers and away from online shopping. Shopify’s stock price fell as much as 7% to $1,377.86 U.S. per share in pre-market trading.
Shopify made the comments about its growth this year when reporting its fourth-quarter results. The company’s revenue in the fourth quarter was $978 million U.S., above analysts’ forecasts for $910 million U.S., fueled by a boom in online shopping during the global pandemic.
Gross merchandise value, the broadest measure of product sales flowing through Shopify’s platform, was $41.1 billion U.S. in the fourth quarter, up 99% from the same quarter a year earlier, helped by soaring demand for online shopping during the pandemic. Full-year gross merchandise value was $119.6 billion U.S.
The company posted fourth quarter adjusted earnings of $1.58 U.S. per share that beat analyst estimates of $1.21 U.S. per share. Revenue of $977.7 million U.S. was nearly double the $505.2 million U.S. a year earlier.
Since it was founded in 2004, Shopify has expanded from a core software business, helping businesses get online quickly, to providing an array of services to companies including payments, lending, and shipping.
Shopify said it will spend money to improve its software platform and develop its payments, shipping, capital and Shopify Plus products this year.
Tech Insider
