Shopify sinks 18% after 4th-quarter earnings reveal outlook for slower revenue growth in 2022

• Shopify stock dropped as much as 18% Wednesday on a lackluster forecast for 2022.
• The ecommerce company anticipates revenue growth for the full year to be lower than the 57% achieved in 2021.

Shopify stock plummeted as much as 18% Wednesday after the company predicted revenue growth will slow down as the pandemic-related surge in e-commerce should cool moving forward.

For 2022, Shopify anticipates its revenue growth for the full year to be lower than the 57% achieved in 2021, though management didn't offer a more specific forecast.

"We do not expect the COVID-triggered acceleration of ecommerce in the first half of 2021 from lockdowns and government stimulus to repeat in the first half of 2022," the company said in its fourth-quarter earnings report.

Shopify expects its commercial initiatives to gain momentum in the second half of 2022, with its year-over-year revenue growth highest in the fourth quarter.

Meanwhile, fourth-quarter results were strong. The pandemic bolstered online retail, and the number of merchants using Shopify's e-commerce platform is now nearly double 2019 levels.

Revenue of $1.38 billion beat estimates of $1.34 billion, and adjusted earnings per share of $1.36 came in above the expected $1.27.

Over the course of 2021, Shopify launched app integrations for TikTok and Spotify, as well as a host of other tools for sellers to use on the platform. It also developed its Shop app, which analysts have said could drive important growth and allow it to challenge Amazon.

In the past 12 months, shares of Shopify are down about 50% and are currently hovering around $727.