Shopify's 2024 Earnings Show Strong Revenue and Profit Growth

Shopify's latest earnings report reflects a robust revenue growth, with a significant increase in net income from the previous year. Investors are eager to see if the stock remains a viable investment or if caution is warranted due to high valuation.

Date: 16-02-2025

AI Rating: 7

Earnings Per Share (EPS)
Although the report does not directly mention EPS, it highlighted that Shopify achieved net income of just over $2 billion in 2024, vastly improving upon the $132 million profit in 2023. This jump signals a return to profitability after a challenging previous year.

Revenue Growth
For the year 2024, Shopify reported revenue of nearly $8.9 billion, reflecting a notable 26% increase compared to 2023. The growth was driven by both segments: a 28% rise in subscription services and a 25% increase in merchant services.

Net Income
The report underscores the impressive net income of over $2 billion for Shopify in 2024, a significant rebound from the previous year's near-complete loss of profitability due to an impairment charge.

Profit Margins
While specific profit margin figures are not shared, the substantial net income in contrast to last year's losses indicates improved operational efficiency and profitability.

Future Outlook
The projected revenue growth in the "mid-twenties percentage rate" closely matches the 2024 figures and might temper investor expectations following strong results from the fourth quarter.

Valuation Concerns
Shopify's current price-to-earnings ratio (P/E) of 77 and a price-to-sales ratio (P/S) of 18 suggest that the stock is trading at a high valuation. This may affect how investors approach the stock, leading to a more cautious investment stance due to perceived risk.

Stocks: SHOP