Shopify Stock Momentum is Backed by Whopping $2.3 Billion Black Friday Sales

Shopify stock price soared more than 4% in the past five days to the $1000 mark as Black Friday sales of $2.3 billion increased 75% from the past year period.

The sales growth is driven by categories including accessories, apparel, health, home and beauty, and garden.

“In just a single day, merchants around the world produced more than 80% of the sales of the entire holiday shopping weekend last year,”

Shopify President Finkelstein said.

Shopify stock is backed by robust sales growth

The stock price of online shopping platform is backed by strong revenue growth momentum. The revenue of $767.4 million soared 96% from the past year period.

Subscription solutions revenue accounted for $245.3 million while merchant solutions revenue jumped 132% to $522.1 million.

Jefferies has provided buy ratings as the firm expects Shopify to top $10 billion in revenues by 2025. “We have a greater appreciation for SHOP’s ability to deliver robust growth for the next several years and reach ~$10B of revenue in 2025 powered by a structural pull forward in e-commerce activity and better monetization of gross margin value.”

The company also turned profitable in the latest quarter. Its operating income in the latest quarter stood around $50 million compared to a loss of $35 million in the year-ago period.

Fundamentals are strong for online shopping trends

The company appears in a strong position to accelerate revenue growth. This is because of consumers shift towards online platforms. The second coronavirus wave has been adding to growth trends.

The $2.3 billion sales in a single day would enhance its fourth-quarter revenue. In addition, the company’s strategy of improving cross border transactions would strengthen its revenue base. The company says 14% of cross-border orders placed on the platform on Black Friday.