Shopify's stock slides after earnings. This is what's worrying Wall Street.

The company missed revenue expectations, a tough outcome in today's less forgiving tech market Shopify topped profit expectations for the latest quarter but came up just short on revenue. Shopify shares are falling on Tuesday as investors pan a mixed earnings report. The company, which provides tools to help businesses operate online stores, reported adjusted earnings per share of 49 cents for the September quarter, up from 34 cents a year before - and ahead of the 47-cent FactSet consensus. But revenue of $3.74 billion fell below the $3.77 billion figure that analysts were modeling, a tough outcome in a market in which investors have become more discerning about technology companies' results. "The market's not going to like this one," Seaport Research analyst Jeff Cantwell said in a note to clients. Gross merchandise volume, or the dollar value of purchases made through Shopify's (SHOP) platform, was up 29.5% to $119.1 billion, but growth slowed from the 31.6% rate in the June quarter. Shares were down 8% in morning action on Tuesday. The stock trades at about 65 times estimates for forward earnings, while the S&P 500 SPX trades at a multiple of about 18 times forward earnings, according to Dow Jones Market Data. That means investors are paying far more for every dollar earned by Shopify than for the S&P 500 on aggregate. Cantwell said Shopify is in a "tricky place" for now given that "relatively high" valuation multiple. For the December quarter, Shopify said it expects revenue to grow at a percentage rate in the "low-30s." Analysts had been modeling 31% growth. "On the flip side, it's worth bearing in mind that Shopify typically crushes in Q4 (holiday season) and therefore we think the revenue guidance of low thirties growth in Q4 generally looks positive at first glance - but, Shopify's slight miss on revenue in Q3 does open the door for investors to question that guide and also whether there's any potential upside," Cantwell wrote, with guidance referring to the company's forecast. Shopify executives cheered the latest numbers. "Delivering these results at our scale speaks to the strength of our model, our multiple growth drivers and our expanding addressable market," CFO Jeff Hoffmeister said in a release. President Harley Finkelstein called the report "the perfect example" of Shopify's ability to deliver on what merchants need today while investing in agentic commerce and other technologies of the future. -Emily Bary This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

Shopify's stock slides after earnings. This is what's worrying Wall Street.

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