In the latest close session, Shopify (SHOP) was down 1.15% at $136.30. This change lagged the S&P 500's daily gain of 0.5%. Elsewhere, the Dow gained 0.64%, while the tech-heavy Nasdaq added 0.43%.
Shares of the cloud-based commerce company witnessed a loss of 19.28% over the previous month, trailing the performance of the Computer and Technology sector with its loss of 0.15%, and the S&P 500's gain of 0.18%.
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%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.58 billion, up 27.33% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.45 per share and a revenue of $11.46 billion, indicating changes of +11.54% and 0%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for Shopify. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.53% higher within the past month. Shopify presently features a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Shopify has a Forward P/E ratio of 77.83 right now. For comparison, its industry has an average Forward P/E of 17.43, which means Shopify is trading at a premium to the group.
Also, we should mention that SHOP has a PEG ratio of 3.15. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Internet - Services industry stood at 1.79 at the close of the market yesterday.
The Internet - Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 95, placing it within the top 39% of over 250 industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming 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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