Shopify (SHOP) closed the most recent trading day at $404.28, moving -0.87% from the previous trading session. This move lagged the S&P 500’s daily loss of 0.71%. At the same time, the Dow lost 0.81%, and the tech-heavy Nasdaq lost 0.79%.
Heading into today, shares of the cloud-based commerce company had gained 12.16% over the past month, outpacing the Computer and Technology sector’s gain of 7.25% and the S&P 500’s gain of 4.77% in that time.
Investors will be hoping for strength from SHOP as it approaches its next earnings release. The company is expected to report EPS of $0.25, down 3.85% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $484.22 million, up 40.82% from the year-ago period.
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 a result, we can interpret positive estimate revisions as a good sign for 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. Over the past month, the Zacks Consensus EPS estimate has moved 1.85% lower. SHOP is holding a Zacks Rank of #4 (Sell) right now.
In terms of valuation, SHOP is currently trading at a Forward P/E ratio of 476.57. This represents a premium compared to its industry’s average Forward P/E of 28.34.
Investors should also note that SHOP has a PEG ratio of 19.06 right now. 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. SHOP’s industry had an average PEG ratio of 2.62 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 162, which puts it in the bottom 37% 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.