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Why Shopify (SHOP) Outpaced the Stock Market Today

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In the latest market close, Shopify (SHOP - Free Report) reached $81.14, with a +1.1% movement compared to the previous day. The stock outperformed the S&P 500, which registered a daily gain of 0.29%. At the same time, the Dow lost 0.25%, and the tech-heavy Nasdaq gained 0.43%.

Heading into today, shares of the cloud-based commerce company had gained 4.46% over the past month, outpacing the Computer and Technology sector's gain of 3.67% and the S&P 500's gain of 2.08% in that time.

The investment community will be closely monitoring the performance of Shopify in its forthcoming earnings report. It is anticipated that the company will report an EPS of $0.31, marking a 342.86% rise compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $2.07 billion, up 19.19% from the year-ago period.

It's also important for investors to be aware of any recent modifications to analyst estimates for Shopify. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

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. Within the past 30 days, our consensus EPS projection has moved 1.09% higher. Shopify is currently sporting a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, Shopify is holding a Forward P/E ratio of 76.9. This expresses a premium compared to the average Forward P/E of 25.98 of its industry.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 103, which puts it in the top 41% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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