Shares of Shopify Inc (NYSE: SHOP) are up 25% on Thursday after the eCommerce company reported a surprise profit for its first financial quarter.
Shopify stock up on the sale of logistics unit
The tech stock is being rewarded today also because the multinational revealed plans of selling its logistics business to Flexport. Reacting to the announcement, Jim Cramer said:
Logistics is a very hard business. So, they have offloaded logistics to Flexport and they have now become the de facto Amazon for small and medium sized businesses.
On the downside, gross margins in the recently concluded quarter tanked 550 basis points to 47.5%. Still, the Canadian firm expects about a 25% growth in revenue and free cash flow profitability in Q2.
Shopify stock price is now up roughly 65% for the year.
Notable figures in Shopify Q1 earnings print
Earned $68 million that translates to 5 cents per share
Had $1.5 billion loss in the same quarter last year
Adjusted EPS printed at one cent as per the press release
Total revenue jumped 25% year-on-year to $1.5 billion
Consensus was 4 cents loss on $1.42 billion in revenue
Also on Thursday, Shopify said it will lower its global headcount by 20%. On “Squawk on the Street”, Cramer added:
I think it’s incredibly bullish. It’s a remarkable company. [The stock] is probably not done. It’s like a clean, a lean Amazon without the parts that are really expensive.
His outlook is in line with Wall Street that currently has a consensus “overweight” rating on Shopify stock price.
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