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Shopify (SHOP) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Shopify (SHOP - Free Report) closed at $1,198.15, marking a -0.24% move from the previous day. This change lagged the S&P 500's daily gain of 0.03%. At the same time, the Dow lost 0.04%, and the tech-heavy Nasdaq gained 0.55%.

Heading into today, shares of the cloud-based commerce company had gained 0.25% over the past month, lagging the Computer and Technology sector's gain of 5.24% and the S&P 500's gain of 3.99% 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%. Our most recent consensus estimate is calling for quarterly revenue of $903.83 million, up 78.92% from the year-ago period.

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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Within the past 30 days, our consensus EPS projection has moved 2.01% higher. SHOP is currently sporting a Zacks Rank of #1 (Strong Buy).

Digging into valuation, SHOP currently has a Forward P/E ratio of 339.29. This valuation marks a premium compared to its industry's average Forward P/E of 32.58.

It is also worth noting that SHOP currently has a PEG ratio of 10.44. 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 industry currently had an average PEG ratio of 1.78 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 122, which puts it in the top 48% 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.

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


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