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

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In the latest trading session, Shopify (SHOP - Free Report) closed at $1,484.10, marking a -1.33% move from the previous day. This move lagged the S&P 500's daily loss of 0.77%.

Prior to today's trading, shares of the cloud-based commerce company had gained 0.06% over the past month. This has lagged the Computer and Technology sector's gain of 3.13% and the S&P 500's gain of 1.55% in that time.

Investors will be hoping for strength from SHOP as it approaches its next earnings release. In that report, analysts expect SHOP to post earnings of $0.82 per share. This would mark a year-over-year decline of 27.43%. Meanwhile, our latest consensus estimate is calling for revenue of $1.14 billion, up 48.94% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.95 per share and revenue of $4.61 billion, which would represent changes of +24.37% and +57.51%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for SHOP. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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 23.74% higher. SHOP currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, SHOP currently has a Forward P/E ratio of 303.6. Its industry sports an average Forward P/E of 30.4, 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 12.14. 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 3.71 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 114, which puts it in the top 45% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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