Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Shopify (SHOP - Free Report) closed at $1,173.87, marking a -0.52% move from the previous day. This change lagged the S&P 500's daily loss of 0.35%. At the same time, the Dow lost 0.41%, and the tech-heavy Nasdaq lost 0.07%.

Heading into today, shares of the cloud-based commerce company had gained 22.06% over the past month, outpacing the Computer and Technology sector's gain of 6.18% and the S&P 500's gain of 3.21% in that time.

Wall Street will be looking for positivity from SHOP as it approaches its next earnings report date. The company is expected to report EPS of $1.24, up 188.37% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $899.16 million, up 78% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.71 per share and revenue of $2.85 billion. These totals would mark changes of +1136.67% and +80.44%, respectively, from last 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 6.24% higher. SHOP currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, SHOP is holding a Forward P/E ratio of 318.26. For comparison, its industry has an average Forward P/E of 30.71, which means SHOP is trading at a premium to the group.

It is also worth noting that SHOP currently has a PEG ratio of 9.79. 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 1.99 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 179, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SHOP in the coming trading sessions, be sure to utilize Zacks.com.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Shopify Inc. (SHOP) - free report >>

Published in