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

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Shopify (SHOP - Free Report) closed at $805.76 in the latest trading session, marking a +0.04% move from the prior day. This change lagged the S&P 500's 1.9% gain on the day. Elsewhere, the Dow gained 2.05%, while the tech-heavy Nasdaq added 1.75%.

Investors will be hoping for strength from SHOP as it approaches its next earnings release. On that day, SHOP is projected to report earnings of -$0.02 per share, which would represent a year-over-year decline of 114.29%. Meanwhile, our latest consensus estimate is calling for revenue of $497.11 million, up 37.33% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.51 per share and revenue of $2.16 billion. These totals would mark changes of +70% and +36.7%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for SHOP. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.5% higher within the past month. SHOP is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, SHOP is currently trading at a Forward P/E ratio of 1588.44. This valuation marks a premium compared to its industry's average Forward P/E of 32.98.

Also, we should mention that SHOP has a PEG ratio of 51.31. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 2.57 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 64, putting it in the top 26% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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