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

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Shopify (SHOP - Free Report) closed at $205.44 in the latest trading session, marking a +1.47% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.7%. Meanwhile, the Dow gained 0.58%, and the Nasdaq, a tech-heavy index, added 0.69%.

Coming into today, shares of the cloud-based commerce company had gained 15.34% in the past month. In that same time, the Computer and Technology sector gained 3.68%, while the S&P 500 gained 1.95%.

Investors will be hoping for strength from SHOP as it approaches its next earnings release. In that report, analysts expect SHOP to post earnings of -$0.04 per share. This would mark a year-over-year decline of 200%. Meanwhile, our latest consensus estimate is calling for revenue of $308.80 million, up 44.07% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.44 per share and revenue of $1.48 billion, which would represent changes of +15.79% and +37.85%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for SHOP. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 65.61% lower. SHOP is holding a Zacks Rank of #5 (Strong Sell) right now.

In terms of valuation, SHOP is currently trading at a Forward P/E ratio of 461.56. This valuation marks a premium compared to its industry's average Forward P/E of 25.27.

We can also see that SHOP currently has a PEG ratio of 19.5. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SHOP's industry had an average PEG ratio of 2.65 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 145, which puts it in the bottom 44% of all 250+ industries.

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

To follow SHOP in the coming trading sessions, be sure to utilize Zacks.com.




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