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Shopify (SHOP) Suffers a Larger Drop Than the General Market: Key Insights

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Shopify (SHOP - Free Report) closed the latest trading day at $82.33, indicating a -1.45% change from the previous session's end. This move lagged the S&P 500's daily loss of 0.06%. Elsewhere, the Dow gained 0.35%, while the tech-heavy Nasdaq lost 0.76%.

The cloud-based commerce company's shares have seen an increase of 7.24% over the last month, surpassing the Computer and Technology sector's gain of 6.36% and the S&P 500's gain of 3.36%.

Investors will be eagerly watching for the performance of Shopify in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on February 13, 2024. The company is expected to report EPS of $0.31, up 342.86% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.07 billion, up 19.21% from the prior-year quarter.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Shopify. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.09% higher within the past month. Shopify presently features a Zacks Rank of #1 (Strong Buy).

In terms of valuation, Shopify is presently being traded at a Forward P/E ratio of 80.04. This valuation marks a premium compared to its industry's average Forward P/E of 24.1.

The Internet - Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 110, positioning it in the top 44% 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.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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