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Shopify (SHOP) Stock Moves -0.31%: What You Should Know

Zacks Equity Research

In the latest trading session, Shopify (SHOP) closed at $326.20, marking a -0.31% move from the previous day. This change was narrower than the S&P 500's 0.45% loss on the day. Meanwhile, the Dow lost 0.36%, and the Nasdaq, a tech-heavy index, lost 0.33%.

Prior to today's trading, shares of the cloud-based commerce company had lost 16.68% over the past month. This has lagged the Computer and Technology sector's gain of 1.8% and the S&P 500's gain of 0.59% 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 $0.11 per share, which would represent year-over-year growth of 175%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $384.07 million, up 42.22% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.62 per share and revenue of $1.54 billion, which would represent changes of +63.16% and +43.46%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for SHOP. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has moved 0.02% higher. SHOP is currently a Zacks Rank #3 (Hold).

Digging into valuation, SHOP currently has a Forward P/E ratio of 528.15. Its industry sports an average Forward P/E of 25.9, so we one might conclude that SHOP is trading at a premium comparatively.

Meanwhile, SHOP's PEG ratio is currently 22.32. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Internet - Services stocks are, on average, holding a PEG ratio of 2.47 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 157, putting it in the bottom 39% 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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