Shopify (SHOP) Registers a Bigger Fall Than the Market: Important Facts to Note
Shopify (SHOP) ended the recent trading session at $112.48, demonstrating a -3.58% change from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily loss of 0.07%. Elsewhere, the Dow lost 0.37%, while the tech-heavy Nasdaq added 0.03%.
The cloud-based commerce company's shares have seen an increase of 8.22% over the last month, surpassing the Computer and Technology sector's gain of 5.58% and the S&P 500's gain of 3.94%.
Analysts and investors alike will be keeping a close eye on the performance of Shopify in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.28, reflecting a 7.69% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.54 billion, up 24.25% from the year-ago period.
SHOP's full-year Zacks Consensus Estimates are calling for earnings of $1.4 per share and revenue of $10.86 billion. These results would represent year-over-year changes of +7.69% and +22.27%, respectively.
It is also important to note the recent changes to analyst estimates for Shopify. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.1% higher. Right now, Shopify possesses a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Shopify has a Forward P/E ratio of 83.41 right now. This valuation marks a premium compared to its industry average Forward P/E of 20.53.
We can also see that SHOP currently has a PEG ratio of 4.31. 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. Internet - Services stocks are, on average, holding a PEG ratio of 1.52 based on yesterday's closing prices.
The Internet - Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 164, finds itself in the bottom 34% echelons 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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Shopify Inc. (SHOP) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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