Back to top

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

Read MoreHide Full Article

Shopify (SHOP - Free Report) closed at $205.12 in the latest trading session, marking a +1.82% move from the prior day. This change outpaced the S&P 500's 0.22% gain on the day. At the same time, the Dow added 0.15%, and the tech-heavy Nasdaq gained 0.6%.

Coming into today, shares of the cloud-based commerce company had gained 7.45% in the past month. In that same time, the Computer and Technology sector gained 4.32%, while the S&P 500 gained 2.39%.

Investors will be hoping for strength from SHOP as it approaches its next earnings release. The company is expected to report EPS of -$0.04, down 200% from the prior-year quarter. 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 should also note any recent changes to analyst estimates for SHOP. 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 company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 remained stagnant. SHOP currently has a Zacks Rank of #5 (Strong Sell).

Investors should also note SHOP's current valuation metrics, including its Forward P/E ratio of 459.26. For comparison, its industry has an average Forward P/E of 25.33, which means SHOP is trading at a premium to the group.

We can also see that SHOP currently has a PEG ratio of 19.4. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Services industry currently had an average PEG ratio of 2.78 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 159, which puts it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Shopify Inc. (SHOP) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in