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Shopify (SHOP) Stock Sinks As Market Gains: What You Should Know
Shopify (SHOP - Free Report) closed the most recent trading day at $43.88, moving -1.79% from the previous trading session. This move lagged the S&P 500's daily gain of 0.89%. At the same time, the Dow added 1.2%, and the tech-heavy Nasdaq lost 0.68%.
Coming into today, shares of the cloud-based commerce company had gained 2.45% in the past month. In that same time, the Computer and Technology sector gained 2.42%, while the S&P 500 lost 3.9%.
Wall Street will be looking for positivity from Shopify as it approaches its next earnings report date. On that day, Shopify is projected to report earnings of $0 per share, which would represent a year-over-year decline of 100%. Meanwhile, our latest consensus estimate is calling for revenue of $1.43 billion, up 18.69% from the prior-year quarter.
SHOP's full-year Zacks Consensus Estimates are calling for earnings of $0.02 per share and revenue of $6.66 billion. These results would represent year-over-year changes of -50% and +19%, respectively.
It is also important to note the recent changes to analyst estimates for Shopify. 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 0.56% lower within the past month. Shopify is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, Shopify currently has a Forward P/E ratio of 1861.67. For comparison, its industry has an average Forward P/E of 22.43, which means Shopify is trading at a premium to the group.
Meanwhile, SHOP's PEG ratio is currently 139.97. 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 1.4 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 75, which puts it in the top 30% 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.