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Shopify (SHOP) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Shopify (SHOP) closed at $1,357.01, marking a -1.53% move from the previous day. This change lagged the S&P 500's daily loss of 0.69%.

Prior to today's trading, shares of the cloud-based commerce company had lost 7.15% over the past month. This has lagged the Computer and Technology sector's loss of 5.77% and the S&P 500's loss of 2.58% in that time.

SHOP will be looking to display strength as it nears its next earnings release, which is expected to be October 28, 2021. In that report, analysts expect SHOP to post earnings of $1.25 per share. This would mark year-over-year growth of 10.62%. Meanwhile, our latest consensus estimate is calling for revenue of $1.14 billion, up 48.94% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.84 per share and revenue of $4.61 billion, which would represent changes of +71.86% and +57.51%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for SHOP. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. SHOP is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, SHOP is holding a Forward P/E ratio of 201.48. This represents a premium compared to its industry's average Forward P/E of 27.48.

Also, we should mention that SHOP has a PEG ratio of 7.33. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 3.97 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 173, putting it in the bottom 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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