Does Pact With Amazon Make Shopify Stock A Buy?

Shopify stock (NYSE: SHOP) gained about 10% over the past month and remains up by over 80% this year. This is well ahead of the Nasdaq-100, which remains up by 42%. There have been a couple of positive developments for the stock of late. For one, late last month, Shopify launched Amazons Buy With Prime option. The deal will allow Shopify vendors to offer delivery options that use Amazons fulfillment network on their storefront while checking out using their Amazon accounts. This removes a potential risk for Shopify, as Amazon has been looking to monetize merchants from third-party platforms by extending its services such as Prime fulfillment and Amazon Pay.While Shopify vendors could independently add this support previously, it is now officially endorsed by Shopify, potentially meaning that Shopify will get some commissions from transactions. Shopify also posted a better-than-expected set of Q2 results last month. Revenue grew by 31% year-over-year to $1.7 billion, with adjusted earnings coming in at $0.14 per share, compared to a loss in the year-ago quarter, driven by lower adjusted operating expenses. The companys profitability could continue to look up following the divestment of its logistics business, with gross margins for Q3 projected to be about 2% to 3% above the 49.3% recorded in the second quarter due to the sale of the companys logistics business.