It's earnings season -- and two of the market's hottest growth stocks are on deck. Before the market opens tomorrow, e-commerce platform provider Shopify (NYSE:SHOP) will report its financial results for its fourth quarter of 2019. After market close on the following day, streaming-TV specialist Roku (NASDAQ:ROKU) is scheduled to release its fourth-quarter update.
Both of these companies' stocks skyrocketed in 2019. Shopify rose 187% during the year and Roku soared 337%. Year to date, Shopify has continued to rise sharply, gaining 25%. Meanwhile, Roku is up a more modest 5%. Going into these growth stocks' reports this week, investors will be looking for Shopify and Roku to report stellar results in order to justify their frothy valuations.
Before market open on Feb. 12, Shopify will get a chance to prove to investors that their confidence in the company's torrid growth is not in vain.
In the company's third quarter, revenue rose 45% year over year to $390.6 million. The company's non-GAAP (adjusted) loss per share, however, widened from a profit of $0.05 in the year-ago period to $0.29. Shopify's bottom line was negatively impacted by the company's aggressive investment in growth opportunities, including international expansion, brand awareness, and more.
For the company's fourth quarter of 2019, management guided for revenue between $472 million and $482 million and adjusted operating income between $10 million and $20 million. These figures compared to revenue of $344 million and adjusted operating income of $20 million in the fourth quarter of 2018.
Analysts, on average, are expecting Shopify to report revenue of $482 million, translating to 40.2% year-over-year growth. Their consensus forecast for adjusted EPS is $0.24, down from $0.26 in the year-ago period.
Streaming-TV specialist Roku is growing even faster than Shopify. Third-quarter revenue increased 50% year over year to $260.9 million, fueled primarily by a 79% jump in platform revenue. Player revenue rose 11%.
These strong results led management to lift its full-year revenue outlook. Before the company reported its third-quarter results, management was expecting total 2019 revenue to be between $1.075 billion and $1.095 billion. But the company's updated top-line guidance calls for revenue between $1.098 billion and $1.113 billion.
Management's revised guidance range for adjusted EBITDA, however, was $30 million -- $5 million below its previous forecast. This reflects "continued investment in the business" and the impact of the company's recent acquisition of demand-side digital advertising platform dataxu.
The consensus analyst estimates for Roku's fourth-quarter revenue and earnings per share are $391.6 million and a loss of $0.14, respectively. These results compare to revenue and adjusted earnings per share of $276 million and $0.05, respectively, in the year-ago period.
Roku will report its quarterly results after market close on Feb. 13.