Shopify Inc. will release its quarterly earnings report this week. The earnings per share could come at $0.20, representing a 42% increase on a year-over-year basis. The share is facing massive selling pressure, and an upbeat earnings result might offer a potential bullish opportunity at any time.
SHOP EPS Estimate Looks Potent To Bulls
According to Wall Street analysts, revenues are anticipated to increase by 18.3% from the previous quarter, reaching $2 billion.
Moreover, the consensus EPS estimate for the quarter has been revised upward by 3.8% in the past 30 days, which indicates an optimistic outlook for the stock. Any modifications to earnings estimates could be valuable in anticipating investors' potential reactions to the stock.
According to analysts' collective assessments, revenues from merchant solutions are anticipated to surpass $1.47 billion, representing a 17.6% increase from the previous quarter.
Shopify Revenue Segment Projection
Revenue from subscription solutions could reach $533.71 million, representing a 20% year-over-year increase. Moreover, analysts project that the gross merchandise volume (GMV) will increase to $65.50 billion, up from $55 billion in the previous year.
The gross payments volume (GPV) could increase to $39.88 billion, higher than $31.68 billion in the same quarter of the previous year. The gross profit from merchant solutions is anticipated to increase from $476 million to $587.00 million.
In comparison, analysts expect the gross profit from subscription solutions to increase from $359 million to $436.62 million. By scrutinizing these detailed projections, investors can thoroughly comprehend Shopify's prospective performance in the forthcoming quarter.
SHOP Stock Forecast Technical Analysis
In the daily chart of SHOP stock price, the recent price showed intense selling pressure, creating a gap before the release of the Q2 earnings report. Therefore, investors should monitor how the report comes, as valid price action might come from the near-term zone.
In the main chart, the ongoing selling pressure is valid below the 100-day Simple Moving Average, while the 20-day EMA is also above the current price. In this context, the downside momentum might continue until the Shopify stock price finds valid support.
On the other hand, the volume structure looks potent for bulls as the current price is overextended from the previous high volume line. It is a sign that a sufficient upward correction is pending, which might create a potential bullish opportunity.
Based on the daily market outlook of SHOP, a bearish continuation with bullish exhaustion from the 50.00 to 42.50 area could be a potential long opportunity. However, an immediate bullish pressure might come from where a daily close above the 62.19 level might create another long signal. In both cases, the price will likely move higher and reach the 77.19 level.
On the other hand, a downbeat earnings forecast could maintain the momentum below the 20 day EMA, increasing the possibility of reaching the 35.00 area.
