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Shopify (SHOP) Outpaces Stock Market Gains: What You Should Know

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Shopify (SHOP - Free Report) ended the recent trading session at $115.00, demonstrating a +1.19% change from the preceding day's closing price. This move outpaced the S&P 500's daily gain of 0.52%. Elsewhere, the Dow saw an upswing of 0.63%, while the tech-heavy Nasdaq appreciated by 0.48%.

Prior to today's trading, shares of the cloud-based commerce company had gained 6% lagged the Computer and Technology sector's gain of 7.56% and outpaced the S&P 500's gain of 4.27%.

Investors will be eagerly watching for the performance of Shopify in its upcoming earnings disclosure. The company is expected to report EPS of $0.28, up 7.69% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $2.54 billion, indicating a 24.25% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.4 per share and revenue of $10.86 billion. These totals would mark changes of +7.69% and +22.27%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for Shopify. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.1% higher. At present, Shopify boasts a Zacks Rank of #3 (Hold).

Looking at valuation, Shopify is presently trading at a Forward P/E ratio of 81.26. This signifies a premium in comparison to the average Forward P/E of 19.52 for its industry.

We can additionally observe that SHOP currently boasts a PEG ratio of 4.2. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Services industry had an average PEG ratio of 1.37 as trading concluded yesterday.

The Internet - Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 146, placing it within the bottom 41% of over 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.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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