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

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Shopify (SHOP - Free Report) closed the most recent trading day at $544.37, moving -1.59% from the previous trading session. This move lagged the S&P 500's daily loss of 1.3%. Meanwhile, the Dow lost 0.69%, and the Nasdaq, a tech-heavy index, lost 0.37%.

Prior to today's trading, shares of the cloud-based commerce company had lost 38.08% over the past month. This has lagged the Computer and Technology sector's loss of 8.81% and the S&P 500's loss of 5.33% in that time.

Shopify will be looking to display strength as it nears its next earnings release. In that report, analysts expect Shopify to post earnings of $1.29 per share. This would mark a year-over-year decline of 35.82%. Meanwhile, our latest consensus estimate is calling for revenue of $1.26 billion, up 26.97% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.88 per share and revenue of $6.05 billion, which would represent changes of +7.33% and +31.2%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Shopify. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 4.14% lower. Shopify is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Shopify is currently trading at a Forward P/E ratio of 80.37. For comparison, its industry has an average Forward P/E of 22.4, which means Shopify is trading at a premium to the group.

Meanwhile, SHOP's PEG ratio is currently 2.5. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Services industry currently had an average PEG ratio of 1.97 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 170, putting it in the bottom 34% 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.

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

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