Shopify (SHOP) closed at $429 in the latest trading session, marking a -0.28% move from the prior day. This change was narrower than the S&P 500’s 0.29% loss on the day. At the same time, the Dow lost 0.46%, and the tech-heavy Nasdaq lost 0.27%.
Heading into today, shares of the cloud-based commerce company had gained 15.63% over the past month, outpacing the Computer and Technology sector’s gain of 7.47% and the S&P 500’s gain of 4.56% 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, our latest consensus estimate is calling for revenue of $484.22 million, up 40.82% from the prior-year quarter.
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. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. SHOP currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, SHOP is holding a Forward P/E ratio of 502.74. For comparison, its industry has an average Forward P/E of 27.85, which means SHOP is trading at a premium to the group.
It is also worth noting that SHOP currently has a PEG ratio of 20.11. 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 2.6 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 185, putting it in the bottom 28% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
To follow SHOP in the coming trading sessions, be sure to utilize Zacks.com.