Shopify (SHOP) ended the recent trading session at $111.62, demonstrating a -2.23% change from the preceding day’s closing price. The stock fell short of the S&P 500, which registered a loss of 0.01% for the day. Meanwhile, the Dow gained 0.14%, and the Nasdaq, a tech-heavy index, lost 0.46%.
Coming into today, shares of the cloud-based commerce company had gained 7.1% in the past month. In that same time, the Computer and Technology sector lost 2.57%, while the S&P 500 lost 1.4%.
The investment community will be closely monitoring the performance of Shopify in its forthcoming earnings report. The company’s earnings per share (EPS) are projected to be $0.39, reflecting a 11.43% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.43 billion, up 28.03% from the year-ago period.
SHOP’s full-year Zacks Consensus Estimates are calling for earnings of $1.82 per share and revenue of $14.71 billion. These results would represent year-over-year changes of +55.56% and +27.26%, respectively.
Investors should also take note of any recent adjustments to analyst estimates for Shopify. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. At present, Shopify boasts a Zacks Rank of #3 (Hold).
In terms of valuation, Shopify is currently trading at a Forward P/E ratio of 62.66. This represents a premium compared to its industry average Forward P/E of 14.42.
Meanwhile, SHOP’s PEG ratio is currently 2.4. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. As of the close of trade yesterday, the Internet – Services industry held an average PEG ratio of 1.52.
The Internet – Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 167, which puts it in the bottom 32% of all 250+ industries.
