Shopify (SHOP) Stock Sinks As Market Gains: What You Should Know
In the latest trading session, Shopify (SHOP) closed at $304.25, marking a -0.52% move from the previous day. This move lagged the S&P 500's daily gain of 0.97%. Meanwhile, the Dow gained 1.35%, and the Nasdaq, a tech-heavy index, added 1.39%.
Prior to today's trading, shares of the cloud-based commerce company had gained 14.47% over the past month. This has outpaced the Computer and Technology sector's loss of 1.04% and the S&P 500's gain of 0.64% in that time.
Investors will be hoping for strength from SHOP as it approaches its next earnings release. On that day, SHOP is projected to report earnings of $0.04 per share, which would represent year-over-year growth of 100%. Our most recent consensus estimate is calling for quarterly revenue of $350.06 million, up 42.9% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.57 per share and revenue of $1.51 billion. These totals would mark changes of +50% and +40.24%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for SHOP. These revisions typically reflect the latest short-term business trends, which can change frequently. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 4.51% higher within the past month. SHOP is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that SHOP has a Forward P/E ratio of 535.76 right now. Its industry sports an average Forward P/E of 27.77, so we one might conclude that SHOP is trading at a premium comparatively.
We can also see that SHOP currently has a PEG ratio of 14.68. 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. SHOP's industry had an average PEG ratio of 2.87 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 69, putting it in the top 27% 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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