Shopify (SHOP) Outpaces Stock Market Gains: What You Should Know
Shopify (SHOP) closed at $1,199.82 in the latest trading session, marking a +0.97% move from the prior day. This move outpaced the S&P 500's daily gain of 0.23%. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq gained 0.43%.
Heading into today, shares of the cloud-based commerce company had gained 10.63% over the past month, outpacing the Computer and Technology sector's gain of 4.19% and the S&P 500's gain of 3.86% in that time.
Wall Street will be looking for positivity from SHOP as it approaches its next earnings report date. On that day, SHOP is projected to report earnings of $1.24 per share, which would represent year-over-year growth of 188.37%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $901.05 million, up 78.37% from the year-ago period.
Investors might also notice recent changes to analyst estimates for SHOP. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. SHOP is currently a Zacks Rank #3 (Hold).
Investors should also note SHOP's current valuation metrics, including its Forward P/E ratio of 337.02. This valuation marks a premium compared to its industry's average Forward P/E of 31.15.
Also, we should mention that SHOP has a PEG ratio of 10.37. 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. SHOP's industry had an average PEG ratio of 1.84 as of yesterday's close.
The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 128, putting it in the top 50% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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