The latest trading session saw Shopify (SHOP) ending at $83.65, denoting a -0.37% adjustment from its last day's close. The stock fell short of the S&P 500, which registered a gain of 0.13% for the day. Meanwhile, the Dow lost 1.33%, and the Nasdaq, a tech-heavy index, lost 0.13%.
Coming into today, shares of the cloud-based commerce company had lost 17.31% in the past month. In that same time, the Computer and Technology sector lost 9.27%, while the S&P 500 lost 6.3%.
The upcoming earnings release of Shopify will be of great interest to investors. The company is expected to report EPS of $0.26, up 30% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.33 billion, up 25.28% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.48 per share and a revenue of $10.85 billion, indicating changes of +13.85% and +22.22%, respectively, from the former year.
Any recent changes to analyst estimates for Shopify should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.56% lower. As of now, Shopify holds a Zacks Rank of #3 (Hold).
From a valuation perspective, Shopify is currently exchanging hands at a Forward P/E ratio of 56.71. Its industry sports an average Forward P/E of 17.52, so one might conclude that Shopify is trading at a premium comparatively.
We can also see that SHOP currently has a PEG ratio of 2.5. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Services was holding an average PEG ratio of 1.2 at yesterday's closing price.
The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 146, this industry ranks in the bottom 42% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Shopify Inc. (SHOP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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