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Shopify (SHOP) - Free Report

Shopify's stock price took a hit on Tuesday, despite the broader market's gains. The e-commerce platform provider's shares fell 2.5% to close at $1,344.99 per share.

Despite the decline, Shopify's stock has still managed to rise 14.5% over the past three months, outperforming the broader market. However, the recent decline may be attributed to the company's mixed quarterly results.

Shopify's quarterly earnings report, released last week, showed a 47% year-over-year increase in revenue to $878.9 million. However, the company's adjusted earnings per share (EPS) came in at $1.13, missing analysts' estimates of $1.15 per share.

The company's revenue growth was driven by a 51% increase in merchant solutions revenue, which accounted for 63% of total revenue. However, Shopify's gross profit margin declined to 56.5% in the quarter, down from 57.2% in the prior-year period.

Shopify's management attributed the decline in gross profit margin to the company's efforts to expand its offerings and improve the customer experience. The company also announced a $200 million share repurchase program, which may have contributed to the stock's decline.

Despite the recent decline, Shopify's stock remains one of the most popular in the e-commerce space. The company's strong revenue growth and expanding offerings have made it an attractive option for investors looking to capitalize on the growing e-commerce trend.

With Shopify's shares now trading at a forward price-to-earnings ratio of 76.5, some investors may see the recent decline as an opportunity to buy the stock at a discount. However, others may be cautious given the company's mixed quarterly results and the potential for continued competition in the e-commerce space.

For now, Shopify's stock remains a key player in the e-commerce space, and investors will be watching closely to see if the company can regain its momentum in the coming quarters.