In the latest trading session, Shopify (SHOP) closed at $168.45, marking a +1.35% move from the previous day. This change outpaced the S&P 500's 0.62% gain on the day. At the same time, the Dow added 0.99%, and the tech-heavy Nasdaq gained 0.65%.
The cloud-based commerce company's shares have seen an increase of 4.92% over the last month, surpassing the Computer and Technology sector's loss of 1.47% and the S&P 500's gain of 0.59%.
Market participants will be closely following the financial results of Shopify in its upcoming release. In that report, analysts expect Shopify to post earnings of $0.5 per share. This would mark year-over-year growth of 13.64%. Simultaneously, our latest consensus estimate expects the revenue to be $3.58 billion, showing a 27.33% escalation compared to the year-ago quarter.
SHOP's full-year Zacks Consensus Estimates are calling for earnings of $1.45 per share and revenue of $11.46 billion. These results would represent year-over-year changes of +11.54% and 0%, respectively.
Any recent changes to analyst estimates for Shopify should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.4% lower. Right now, Shopify possesses a Zacks Rank of #4 (Sell).
Investors should also note Shopify's current valuation metrics, including its Forward P/E ratio of 94.17. This denotes a premium relative to the industry average Forward P/E of 18.07.
We can additionally observe that SHOP currently boasts a PEG ratio of 3.81. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. SHOP's industry had an average PEG ratio of 1.71 as of yesterday's close.
The Internet - Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 99, positioning it in the top 41% of all 250+ industries.
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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Shopify Inc. (SHOP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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