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

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In the latest close session, Shopify (SHOP - Free Report) was down 3.61% at $143.46. The stock fell short of the S&P 500, which registered a loss of 0.5% for the day. Elsewhere, the Dow saw a downswing of 0.38%, while the tech-heavy Nasdaq depreciated by 0.5%.

The stock of cloud-based commerce company has risen by 6.39% in the past month, lagging the Computer and Technology sector's gain of 8.21% and overreaching the S&P 500's gain of 2.74%.

Investors will be eagerly watching for the performance of Shopify in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.34, signifying a 5.56% drop compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $2.74 billion, showing a 26.74% escalation compared to the year-ago quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.44 per share and a revenue of $11.21 billion, indicating changes of +10.77% and +26.24%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Shopify. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. As of now, Shopify holds a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Shopify has a Forward P/E ratio of 103.35 right now. Its industry sports an average Forward P/E of 24.84, so one might conclude that Shopify is trading at a premium comparatively.

Meanwhile, SHOP's PEG ratio is currently 5.25. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Internet - Services industry held an average PEG ratio of 1.67.

The Internet - Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 88, placing it within the top 36% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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