Shopify (SHOP) closed at $163.74 in the latest trading session, marking a -2.47% move from the prior day. This change lagged the S&P 500's daily loss of 0.14%. Meanwhile, the Dow lost 0.2%, and the Nasdaq, a tech-heavy index, lost 0.24%.
Prior to today's trading, shares of the cloud-based commerce company had gained 12.46% outpaced the Computer and Technology sector's gain of 0.2% and the S&P 500's gain of 0.94%.
The upcoming earnings release of Shopify will be of great interest to investors. It is anticipated that the company will report an EPS of $0.5, marking a 13.64% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $3.58 billion, reflecting a 27.33% rise from the equivalent quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.45 per share and revenue of $11.46 billion. These totals would mark changes of +11.54% and +29.03%, respectively, from last year.
Investors should also pay attention to any latest changes in analyst estimates for Shopify. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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 past month, the Zacks Consensus EPS estimate has moved 0.41% lower. Shopify currently has a Zacks Rank of #3 (Hold).
From a valuation perspective, Shopify is currently exchanging hands at a Forward P/E ratio of 115.78. This signifies a premium in comparison to the average Forward P/E of 19.48 for its industry.
Meanwhile, SHOP's PEG ratio is currently 4.68. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Internet - Services stocks are, on average, holding a PEG ratio of 1.81 based on yesterday's closing prices.
The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 87, this industry ranks in the top 36% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow SHOP in the coming trading sessions, be sure to utilize Zacks.com.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Shopify Inc. (SHOP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
