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Shopify Loses 7.5% Ahead of Earnings: What To Expect
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Shares of Shopify (SHOP - Free Report) dropped about 7.5% during regular hours Monday, the last day of trading before the e-commerce solutions company releases its latest quarterly earnings report. U.S. stocks were down across the board, but trendy growth stocks like Shopify felt the worst of the selloff, underscoring the importance of tomorrow’s earnings announcement for the company.
Shopify shares have skyrocketed more than 75% over the past year as its platform for developing independent virtual marketplaces and online stores has really taken off. However, the firm has faced plenty of criticism during this explosive stretch, with some skeptics accusing Shopify of using get-rich-quick marketing to attract unwitting customers who will inevitably leave.
It is, of course, possible for Shopify to quiet some of those doubters with a great report. But what should investors expect to see from the company on Tuesday morning? Let’s take a closer look.
Shopify will release its Q2 fiscal 2018 results before the market opens on Tuesday. Here’s what analysts are expecting, according to our Zacks Consensus Estimates:
Earnings: Shopify is projected to post an adjusted loss of two cents per share, down from a loss of just a penny in the prior-year quarter.
Estimate Revisions: Shopify has seen one negative revision to its soon-to-be-reported quarter’s EPS estimates within the past 30 days. Investors should also note that Shopify’s Most Accurate Estimate—the representation of the most recent analyst sentiment—sits a penny lower than the consensus. This implies that the latest sentiment has not been as optimistic.
Revenue: Consensus estimates have Shopify’s Q2 revenue pegged at $234.7 million. This would mark growth of about 55% from the year-ago period.
Valuation
Shopify is trading at about 21.5x trailing 12-month revenue heading into the report. This is a steep premium compared to the industry’s average of 8.4x. Over the past year, SHOP had traded as high as 23.4x and as low as 14.9x. Its 52-week median sales multiple is 18.7x.
Bottom Line
For a lot of investors, Shopify is an exciting company which perfectly illustrates how to capitalize on the evolving nature of the internet. For others, it represents a sketchy business model with questionable marketing practices.
Regardless, 75% returns over the past year make SHOP a must-watch stock ahead of earnings. Shopify and others like it sold off hard on Monday, but the firm could very well rebound if it outperforms the above expectations.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Shopify Loses 7.5% Ahead of Earnings: What To Expect
Shares of Shopify (SHOP - Free Report) dropped about 7.5% during regular hours Monday, the last day of trading before the e-commerce solutions company releases its latest quarterly earnings report. U.S. stocks were down across the board, but trendy growth stocks like Shopify felt the worst of the selloff, underscoring the importance of tomorrow’s earnings announcement for the company.
Shopify shares have skyrocketed more than 75% over the past year as its platform for developing independent virtual marketplaces and online stores has really taken off. However, the firm has faced plenty of criticism during this explosive stretch, with some skeptics accusing Shopify of using get-rich-quick marketing to attract unwitting customers who will inevitably leave.
It is, of course, possible for Shopify to quiet some of those doubters with a great report. But what should investors expect to see from the company on Tuesday morning? Let’s take a closer look.
Shopify Inc. Price, Consensus and EPS Surprise
Shopify Inc. Price, Consensus and EPS Surprise | Shopify Inc. Quote
Earnings Outlook
Shopify will release its Q2 fiscal 2018 results before the market opens on Tuesday. Here’s what analysts are expecting, according to our Zacks Consensus Estimates:
Earnings: Shopify is projected to post an adjusted loss of two cents per share, down from a loss of just a penny in the prior-year quarter.
Estimate Revisions: Shopify has seen one negative revision to its soon-to-be-reported quarter’s EPS estimates within the past 30 days. Investors should also note that Shopify’s Most Accurate Estimate—the representation of the most recent analyst sentiment—sits a penny lower than the consensus. This implies that the latest sentiment has not been as optimistic.
Revenue: Consensus estimates have Shopify’s Q2 revenue pegged at $234.7 million. This would mark growth of about 55% from the year-ago period.
Valuation
Shopify is trading at about 21.5x trailing 12-month revenue heading into the report. This is a steep premium compared to the industry’s average of 8.4x. Over the past year, SHOP had traded as high as 23.4x and as low as 14.9x. Its 52-week median sales multiple is 18.7x.
Bottom Line
For a lot of investors, Shopify is an exciting company which perfectly illustrates how to capitalize on the evolving nature of the internet. For others, it represents a sketchy business model with questionable marketing practices.
Regardless, 75% returns over the past year make SHOP a must-watch stock ahead of earnings. Shopify and others like it sold off hard on Monday, but the firm could very well rebound if it outperforms the above expectations.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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