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

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Shopify (SHOP - Free Report) closed the most recent trading day at $1,516.47, moving +1.45% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.35%.

Heading into today, shares of the cloud-based commerce company had gained 14.4% over the past month, outpacing the Computer and Technology sector's gain of 4.23% and the S&P 500's gain of 3.36% in that time.

Wall Street will be looking for positivity from SHOP as it approaches its next earnings report date. This is expected to be July 28, 2021. The company is expected to report EPS of $0.98, down 6.67% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.03 billion, up 43.98% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.39 per share and revenue of $4.36 billion. These totals would mark changes of +10.3% and +48.69%, 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. 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. The Zacks Consensus EPS estimate has moved 10.54% 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 340.31 right now. This valuation marks a premium compared to its industry's average Forward P/E of 29.93.

We can also see that SHOP currently has a PEG ratio of 13.61. 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 1.79 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 216, putting it in the bottom 15% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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