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Shopify’s (SHOP) Q3 Guidance Points to Strong Growth

Shopify Inc. (NASDAQ:SHOP) is one of the top 10 stocks to buy now according to Cathie Wood. On August 6, the company affirmed continued growth in the third quarter after delivering fiscal solid second-quarter results.

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For the fiscal third quarter, Shopify expects its revenue to grow by a mid-to-high twenties percentage rate. It also expects gross profit to increase by a low-to-mid-twenties percentage rate, backed by a free cash flow margin in the mid-to-high teens. The solid guidance comes as Shopify continues to focus on innovation and strategic expansion into the international market.

The solid third-quarter guidance comes as Shopify delivers a 31% year-over-year revenue growth to $2.7 billion, better than the expected $2.54 billion. However, earnings per share missed the forecast, coming in at $0.27 against a forecast of $0.29. Free cash flow margin also improved by 16% marking the eighth consecutive quarter of double-digit free cash flow margin expansion.

Shopify Inc. (NASDAQ:SHOP) offers an e-commerce platform that enables businesses to create, manage, and scale their online stores. It provides tools for building a website, processing payments, managing inventory, and marketing products. Its solutions allow businesses to sell online and in physical locations, integrating both aspects into a unified platform.

While we acknowledge the potential of SHOP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SHOP and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 12 Best Consumer Goods Stocks Billionaires Are Quietly Buying and Goldman Sachs Penny Stocks: Top 12 Stock Picks.

Disclosure: None. This article is originally published at Insider Monkey.

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