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

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Shopify (SHOP - Free Report) closed the most recent trading day at $911.34, moving +0.72% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.43%. At the same time, the Dow added 0.5%, and the tech-heavy Nasdaq gained 0.75%.

Wall Street will be looking for positivity from SHOP as it approaches its next earnings report date. In that report, analysts expect SHOP to post earnings of -$0.02 per share. This would mark a year-over-year decline of 114.29%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $497.55 million, up 37.45% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.51 per share and revenue of $2.16 billion, which would represent changes of +70% and +36.81%, respectively, from the prior year.

Any recent changes to analyst estimates for SHOP should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.18% higher. SHOP is currently a Zacks Rank #3 (Hold).

Looking at its valuation, SHOP is holding a Forward P/E ratio of 1772.69. This represents a premium compared to its industry's average Forward P/E of 32.92.

We can also see that SHOP currently has a PEG ratio of 52.18. 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 industry currently had an average PEG ratio of 2.7 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 66, putting it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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


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