In the latest trading session, Shopify (SHOP) closed at $329.50, marking a -0.22% move from the previous day. This change lagged the S&P 500's daily gain of 0.47%. Elsewhere, the Dow lost 0.29%, while the tech-heavy Nasdaq added 0.85%.
Prior to today's trading, shares of the cloud-based commerce company had gained 16.26% over the past month. This has outpaced the Computer and Technology sector's gain of 2.8% and the S&P 500's gain of 2.08% in that time.
Investors will be hoping for strength from SHOP as it approaches its next earnings release, which is expected to be August 1, 2019. On that day, SHOP is projected to report earnings of $0.03 per share, which would represent year-over-year growth of 50%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $350.58 million, up 43.12% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.58 per share and revenue of $1.51 billion. These totals would mark changes of +52.63% and +40.79%, respectively, from last 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 has moved 2.91% higher. SHOP is currently a Zacks Rank #4 (Sell).
Investors should also note SHOP's current valuation metrics, including its Forward P/E ratio of 565.95. For comparison, its industry has an average Forward P/E of 28.51, which means SHOP is trading at a premium to the group.
Investors should also note that SHOP has a PEG ratio of 23.91 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Services stocks are, on average, holding a PEG ratio of 3.54 based on yesterday's closing prices.
The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 150, which puts it in the bottom 42% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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