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Here's Why Shopify (SHOP) Fell More Than Broader Market
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Shopify (SHOP - Free Report) ended the recent trading session at $111.62, demonstrating a -2.23% change from the preceding day's closing price. The stock fell short of the S&P 500, which registered a loss of 0.01% for the day. Meanwhile, the Dow gained 0.14%, and the Nasdaq, a tech-heavy index, lost 0.46%.
Coming into today, shares of the cloud-based commerce company had gained 7.1% in the past month. In that same time, the Computer and Technology sector lost 2.57%, while the S&P 500 lost 1.4%.
The investment community will be closely monitoring the performance of Shopify in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $0.39, reflecting a 11.43% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.43 billion, up 28.03% from the year-ago period.
SHOP's full-year Zacks Consensus Estimates are calling for earnings of $1.82 per share and revenue of $14.71 billion. These results would represent year-over-year changes of +55.56% and +27.26%, respectively.
Investors should also take note of any recent adjustments to analyst estimates for Shopify. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming 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. At present, Shopify boasts a Zacks Rank of #3 (Hold).
In terms of valuation, Shopify is currently trading at a Forward P/E ratio of 62.66. This represents a premium compared to its industry average Forward P/E of 14.42.
Meanwhile, SHOP's PEG ratio is currently 2.4. 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 1.52.
The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 167, which puts it in the bottom 32% of all 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.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
View the Zacks #1 Rank List
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Here's Why Shopify (SHOP) Fell More Than Broader Market
Shopify (SHOP - Free Report) ended the recent trading session at $111.62, demonstrating a -2.23% change from the preceding day's closing price. The stock fell short of the S&P 500, which registered a loss of 0.01% for the day. Meanwhile, the Dow gained 0.14%, and the Nasdaq, a tech-heavy index, lost 0.46%.
Coming into today, shares of the cloud-based commerce company had gained 7.1% in the past month. In that same time, the Computer and Technology sector lost 2.57%, while the S&P 500 lost 1.4%.
The investment community will be closely monitoring the performance of Shopify in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $0.39, reflecting a 11.43% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.43 billion, up 28.03% from the year-ago period.
SHOP's full-year Zacks Consensus Estimates are calling for earnings of $1.82 per share and revenue of $14.71 billion. These results would represent year-over-year changes of +55.56% and +27.26%, respectively.
Investors should also take note of any recent adjustments to analyst estimates for Shopify. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming 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. At present, Shopify boasts a Zacks Rank of #3 (Hold).
In terms of valuation, Shopify is currently trading at a Forward P/E ratio of 62.66. This represents a premium compared to its industry average Forward P/E of 14.42.
Meanwhile, SHOP's PEG ratio is currently 2.4. 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 1.52.
The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 167, which puts it in the bottom 32% of all 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.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.