Shopify (SHOP 1.07%) stock has plummeted since late 2021 as investors worry about slowing growth for the e-commerce tech platform. The nearly 50% decline might mean market-thumping returns from here, though, if the business maintains some of the impressive momentum shareholders have enjoyed over the past few years.

With that idea in mind, let's look at a few metrics to follow in Shopify's upcoming earnings report, set for Wednesday, Feb. 16.

A florist using a tablet at work.

Image source: Getty Images.

Market share updates

The pandemic added noise around Shopify's growth rate as more commerce was temporarily done online. The company notched several quarters of over 90% year-over-year growth in 2020 and 2021, for example.

Executives said that the selling period through late September represented a more normalized environment. Revenue expanded 46% thanks to a growing merchant base, higher selling volumes, and increased spending on its premium services. "The strength of Shopify's flywheel was on display" in the third quarter, CFO Amy Shapero said in late October.

Management said that the fourth-quarter period would likely be strong even as Shopify adds fewer merchants compared to the record result in late 2020. Shopify should reach roughly $1.7 billion in sales, according to Wall Street analysts, which would translate into an over 70% increase.

Look for market share to rise against huge peers like Amazon (AMZN 2.08%) and eBay (EBAY -1.27%). "We expect our [transaction volumes] in the fourth quarter to continue to grow substantially faster than the e-commerce market," Shapero told investors in October.

Cash and finances

Management at the time warned about several short-term pressures to cash flow and profitability, including the fact that soaring platform engagement is falling in comparison to 2020. Rising costs and supply chain challenges aren't helping, either.

Still, look for Shopify to report impressive gross profitability that's offset slightly by rising spending on the platform. Adjusted operating income rose to 18% of sales through the first nine months of 2021 compared to 12% a year earlier. The rate of increase slowed sharply in Q3, though, and might decelerate even more over the next few quarters.

SHOP Operating Margin (TTM) Chart

SHOP Operating Margin (TTM) data by YCharts

That decline helps explain why many investors have become more conservative about the stock lately. It's unclear where Shopify's profitability will settle after jumping higher through most of the past two years.

The outlook

The biggest question heading into Wednesday's report is whether CEO Tobi Lütke and his team see a bright 2022 ahead. Management's long-term outlook is likely brighter than ever, but the next 12 months might be characterized by slower growth and rising costs.

These factors wouldn't hurt the bullish investing thesis. Shopify is spending more on its platform to handle record engagement, after all. And sales trends were always bound to take a step backward after demand stampeded online through the early phases of the pandemic.

That's why investors should look at the stock's slump over the last few months as a buying opportunity instead of any sign that the business is stumbling. Shopify is gaining share in an industry that's likely to grow quickly over many more years, notwithstanding a temporary pullback as the world emerges from the pandemic.