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Analysts react to Shopify's Black Friday sales data

Published 03/12/2024, 17:44
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Investing.com -- Shopify’s 2024 Black Friday and Cyber Monday (BFCM) sales numbers are drawing mixed reactions from analysts, with both Oppenheimer and Mizuho (NYSE:MFG) noting solid growth but raising questions about broader implications for the company’s performance.

Shopify (NYSE:SHOP) reported BFCM gross merchandise volume (GMV) of $11.5 billion, a 24% year-over-year increase that matches consensus expectations and mirrors the growth rate seen in 2023. 

Analysts at Oppenheimer described the result as “a shade below” their forecast of ~25% growth, while still positioning Shopify for potential full-quarter GMV of $92.9 billion, slightly above the Street estimate of $92.2 billion. 

Oppenheimer highlighted a strong start to the holiday shopping season, which could redistribute sales across the quarter. The firm also noted positives such as a 25% increase in unique shoppers and a rise in cross-border transactions to 16%, signaling stronger international traction.

“We expect the acceleration through the weekend (on tougher comps) will be seen as a mild positive, putting the mid-20%+ revenue growth target back in play,” said Shopify.

Mizuho echoed the solid nature of the BFCM data, pointing to consistency in the 24% growth compared to 2023. 

However, the firm expressed caution, citing a historical pattern where BFCM outperformance relative to full-quarter GMV has averaged 3.5 percentage points over the past two years, a trend less evident this year. 

They also flagged slower growth in Shop Pay usage, down to 58% from 60% in 2023, and a modest 0.4% increase in average order value to $108.56.

Both firms acknowledge Shopify’s robust performance during BFCM but raised questions about its ability to sustain momentum. 

Oppenheimer sees potential for a mid-20% revenue growth target, while Mizuho is more cautious, questioning whether the results justify Shopify’s current valuation levels.

 

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