Shopify Inc. beat profit expectations for the latest quarter and projected margin improvement for the current one, but the company’s disclosures on expenses seemed to be worrying Wall Street. Shares of Shopify
SHOP,
-1.76%
SHOP,
-1.82%
were off more than 8% in Tuesday’s premarket action after the company, which enables businesses to run online shops, said that it expects operating expenses to grow relative to what was seen in the fourth quarter. That rise is expected to be, on a percentage basis, somewhere in the low teens.
“Contrasting to some of management’s commentary from the recent analyst day regarding expense discipline (including the benefits to op leverage from AI), the [first-quarter operating-margin] guide is a little surprising,” Baird analyst Colin Sebastian said in a note to clients. He thought the company’s projection for what he dubbed “meaningfully higher” operating expenses in the first quarter was a factor pressuring the stock, “with buy-side expectations having ramped up” ahead of Shopify’s report. The stock has gained 45% over the past three months, as the S&P 500
SPX
has increased 14%. “Overall, [fourth-quarter results] delivered versus high expectations, but the valuation and lack of margin upside may keep [the stock] from pushing higher today,” Jefferies analyst Samad Samana said in a note to clients. The company posted fourth-quarter net income of $657 million, o …
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SHOP,
-1.76%
SHOP,
-1.82%
were off more than 8% in Tuesday’s premarket action after the company, which enables businesses to run online shops, said that it expects operating expenses to grow relative to what was seen in the fourth quarter. That rise is expected to be, on a percentage basis, somewhere in the low teens.
“Contrasting to some of management’s commentary from the recent analyst day regarding expense discipline (including the benefits to op leverage from AI), the [first-quarter operating-margin] guide is a little surprising,” Baird analyst Colin Sebastian said in a note to clients. He thought the company’s projection for what he dubbed “meaningfully higher” operating expenses in the first quarter was a factor pressuring the stock, “with buy-side expectations having ramped up” ahead of Shopify’s report. The stock has gained 45% over the past three months, as the S&P 500
SPX
has increased 14%. “Overall, [fourth-quarter results] delivered versus high expectations, but the valuation and lack of margin upside may keep [the stock] from pushing higher today,” Jefferies analyst Samad Samana said in a note to clients. The company posted fourth-quarter net income of $657 million, o …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]