Back to top

Image: Bigstock

Shopify (SHOP) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

Shopify (SHOP - Free Report) closed at $447.41 in the latest trading session, marking a +0.18% move from the prior day. This change lagged the S&P 500's 6.24% gain on the day. At the same time, the Dow added 6.38%, and the tech-heavy Nasdaq gained 5.6%.

Coming into today, shares of the cloud-based commerce company had lost 5.22% in the past month. In that same time, the Computer and Technology sector lost 17.19%, while the S&P 500 lost 21.22%.

Wall Street will be looking for positivity from SHOP as it approaches its next earnings report date. On that day, SHOP is projected to report earnings of -$0.17 per share, which would represent a year-over-year decline of 288.89%. Our most recent consensus estimate is calling for quarterly revenue of $445.47 million, up 39% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.19 per share and revenue of $2.17 billion. These totals would mark changes of -36.67% and +37.24%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for SHOP. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 2.77% lower. SHOP currently has a Zacks Rank of #4 (Sell).

Looking at its valuation, SHOP is holding a Forward P/E ratio of 2360.47. This represents a premium compared to its industry's average Forward P/E of 25.87.

It is also worth noting that SHOP currently has a PEG ratio of 91.33. 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. The Internet - Services industry currently had an average PEG ratio of 1.84 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 52, putting it in the top 21% 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.

To follow SHOP in the coming trading sessions, be sure to utilize 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 >>

Published in