Shopify Inc (NYSE: SHOP) stock rises despite Analysts rating pressure

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Shopify Inc (NYSE: SHOP), a cloud-based commerce platform, stock rose over 4.4% on 9th April, 2020 (as of 12:34 pm GMT-4; Source: Google finance) after the company’s stock fell two days back after Raymond James downgraded the stock from Outperform to Market Perform without a price target. Analyst Brian Peterson considers that near-term headwinds that could create a more challenging narrative for the stock. The company had last week its withdrawn its guidance as an indication of slowing trends in March, with the potential for further pressure as the COVID-19 pandemic persists over the coming weeks and months. The company due to the continued momentum in January and February of 2020, has enabled the company to report revenue and adjusted operating income for the first quarter within or ahead of the range of expectations provided on February 12, 2020, despite the current global economic disruption that emerged in March due to outbreak of COVID-19.

Further, the early signs had indicated that brick-and-mortar businesses, due to COVID-19 got affected by the dropoff of foot traffic on the back of stay-at-home policies, are pivoting to online as consumer demand shifts. The merchants are heavily providing discounts to increase the sales. The sales trends are aligning to specific industries based on the evolving environment, consumer concerns and needs. In March, the company had terminated thousands of merchants charging unfair prices or making false claims about COVID-19-related items such as face masks or hand sanitizers.

Meanwhile, the company has extended the90-day free trial to all new standard plan signups. The company is giving Gift cards on all its plans and for all merchants. The company is facilitating local in-store/curbside pickup and delivery for POS merchants. The company has given a $200 million commitment for Shopify Capital while fast-tracking expansion to core geographies working with partners and governments, including in the United Kingdom where Shopify Capital launched on March 30, 2020. The multiple online resources to support merchants, that includes the resources on where to secure government funding and where to find community forums, live webinars, online meetups, and tutorials to help all merchants have an online presence

Additionally, for the first quarter of 2020, the company currently expects revenues to be in the range of $440 million to $446 million. Adjusted operating loss is expected to be in the range of $30 million to $34 million, which excludes stock-based compensation expenses and related payroll taxes of $65 million, and amortization of acquired intangibles of $6 million. The company expects first-quarter 2020 adjusted operating income to include the first full quarter of operating results associated with 6 River Systems, Inc. and the launch of the second major brand campaign in the core geographies, the first campaign of which was in the second quarter of 2019.

 

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