The Motley Fool

Why Shopify Stock Jumped 21% in August

What happened

Shares of Shopify (NYSE: SHOP) gained more than 20% in value last month, according to data provided by S&P Global Market Intelligence, after the multichannel commerce platform reported another quarter of impressive growth.

So what

Shopify’s second-quarter revenue surged 48% year over year to $362 million, driven by strong demand for the company’s online and offline retail operating solutions.

“Our strong performance in the second quarter reflects the success of our ongoing activities and investments to help merchants start selling, sell more, and sell globally,” CFO Amy Shapero said in a press release. “The appeal of entrepreneurship is universal, which is why more entrepreneurs everywhere are attracted to Shopify.”

Better still, Shopify’s non-GAAP earnings per share, which came in at $0.14, was well above analysts’ estimates for adjusted EPS of $0.02.

Now what

In addition to Shopify’s strong second-quarter results, investors are growing increasingly excited about its new fulfillment network. The company’s fulfillment centers will store and ship its merchants’ products across the U.S. Shopify will also provide inventory optimization and other cost-reduction tools to its customers. And, as a key point of differentiation with, Shopify will enable its merchants to display their own brands on customized packaging.

Still, Shopify’s share price has pulled back about 10% in recent days along with other growth stocks. Short-term-minded traders appear to be growing concerned that the U.S. economy could fall into a recession, making them reluctant to pay a premium for fast-growing businesses.

But with its new fulfillment network likely to fuel its growth for many years to come, Shopify’s stock represents a compelling profit opportunity for long-term investors.

This article was originally published on All figures quoted in US dollars unless otherwise stated.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Shopify. The Motley Fool has a disclosure policy.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.