[Moo Brief] Shopify Q2 earnings preview: Can shares rebound after a 30% slump this year?

The Canadian e-commerce giant $Shopify Inc (SHOP.CA)$/ $Shopify (SHOP.US)$ is set to announce its Q2 financial performance for 2024 at 8:30 a.m. ET on August 7.

🎁 20 points: For mooers who correctly guess the price range of $Shopify Inc (SHOP.CA)$'s closing price on Aug 7 ET.

According to the consensus among Wall Street analysts, $Shopify Inc (SHOP.CA)$/ $Shopify (SHOP.US)$'s Q2 performance is expected to show a significant year-on-year improvement. The expected data from Wall Street indicates that $Shopify Inc (SHOP.CA)$/ $Shopify (SHOP.US)$'s Q2 total revenue is anticipated to increase by 17% to $20.1 billion, with a non-GAAP earnings per share of approximately $0.20, suggesting a potential 42% year-on-year growth in earnings per share.

In Q1, $Shopify Inc (SHOP.CA)$/ $Shopify (SHOP.US)$ reported revenue of $18.61 billion, representing a 23.41% year-on-year change, with a net loss of $273 million and a basic loss per share of $0.21.

$Shopify Inc (SHOP.CA)$/ $Shopify (SHOP.US)$'s Performance Declines Amid Economic Pressures and Intense Competition, While $Amazon (AMZN.US)$ Thrives in Digital Payment Sector

Despite the stable growth of the global e-commerce business, lower- and middle-income consumers are facing pressure to tighten their spending, and a sluggish job market has made it difficult to find work. These factors have negatively impacted the sales of $Shopify Inc (SHOP.CA)$/ $Shopify (SHOP.US)$ merchants, contributing to the decline in $Shopify Inc (SHOP.CA)$/ $Shopify (SHOP.US)$'s performance. Year-to-date, $Shopify (SHOP.US)$ has fallen by 30.13%, and over the past 52 weeks, it has dropped by 6.04%. In contrast, $PayPal (PYPL.US)$ has shown strong performance in the digital payment sector, driven by cost reduction measures and growth in total payment volume. Additionally, $Shopify Inc (SHOP.CA)$/ $Shopify (SHOP.US)$'s core customer base consists of small and medium-sized enterprises, which are more vulnerable to the impact of inflation and high interest rates, further weighing down $Shopify Inc (SHOP.CA)$/ $Shopify (SHOP.US)$'s performance.

Moreover, $Shopify Inc (SHOP.CA)$/ $Shopify (SHOP.US)$ faces intense competition in the global e-commerce sector, especially from large e-commerce platforms like $Amazon (AMZN.US)$. Despite introducing AI-based IT tools, Shopify remains at a disadvantage compared to competitors like $Amazon (AMZN.US)$, struggling to expand its market share.

As an investor, how do you see the future of $Shopify Inc (SHOP.CA)$/ $Shopify (SHOP.US)$? Please feel free to drop your thoughts in the comment area below!