Shopify Keeps Climbing Following Q3 Earnings, Add Exposure With ARKF

Shopify stock is continuing to climb on Monday after surging last week in response to the company’s better-than-expected third quarter earnings. 

Shares of Shopify traded up around 17% last Thursday after the company reported that third quarter earnings surpassed Wall Street estimates for both revenue and non-GAAP EPS. Increased take rates associated with the scaling of its merchant solutions helped to accelerate Shopify’s revenue growth from 16% on a year-over-year basis during the second quarter to 22%, while growth in gross merchandise value (GMV) stabilized at 11% year-over-year, ARK Invest wrote in October stock commentary.

“Our conviction is high in management’s ability to monetize the long-term secular shift to e-commerce and social commerce,” ARK wrote. “Shopify is a cloud-based, end-to-end e-commerce solution that enables merchants to conduct business across a variety of storefronts.”

Shopify reported revenue of $1.366 billion during the third quarter, slightly ahead of the Wall Street consensus for $1.34 billion. Shopify lost 2 cents per share on an adjusted basis during the quarter, while the Zacks Consensus Estimate was 7 cents. 

Shopify is the largest holding in the ARK Fintech Innovation ETF (ARKF), weighted 10.48% as of October 31, according to the fund’s website.

ARKF is an actively managed fund that invests in U.S. and global companies deemed to be engaged in the theme of fintech innovation, defined as the introduction of a technologically enabled new product or service that potentially changes the way the financial sector works. 

This includes transaction innovations, blockchain technology, risk transformation, frictionless funding platforms, customer-facing platforms, and new intermediaries, according to the fund’s website. 

Aside from Shopify, other top holdings in ARKF as of October 31 include Block Inc. (SQ, 9.09%), Coinbase Global Inc. – Class A (COIN, 8.08%), Twilio Inc. – A (TWLO, 7.24%), Robinhood Markets Inc. – A (HOOD, 6.63%), Mercadolibre Inc. (MELI, 6.14%), UIPATH Inc. – Class A (PATH, 4.96%), DraftKings Inc. (DKNG UW, 4.52%), Discovery Ltd. (DSY, 4.20%), and Toast Inc. (TOST, 4.18%), according to the fund’s website. 

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