Shopify (SHOP) closed the most recent trading day at $142.33, moving -3.66% from the previous trading session. The stock fell short of the S&P 500, which registered a loss of 0.76% for the day. At the same time, the Dow lost 0.68%, and the tech-heavy Nasdaq lost 1.13%.
Shares of the cloud-based commerce company witnessed a loss of 3.99% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 6.68%, and the S&P 500’s gain of 1.26%.
The upcoming earnings release of Shopify will be of great interest to investors. The company is expected to report EPS of $0.44, up 29.41% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $3.73 billion, indicating a 31.22% increase compared to the same quarter of the previous year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.89 per share and a revenue of $15.18 billion, signifying shifts of +61.54% and +31.33%, respectively, from the last year.
Investors should also pay attention to any latest changes in analyst estimates for Shopify. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts’ favorable outlook on the business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we’ve formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.1% upward. Right now, Shopify possesses a Zacks Rank of #3 (Hold).
In terms of valuation, Shopify is presently being traded at a Forward P/E ratio of 78.06. This denotes a premium relative to the industry average Forward P/E of 16.02.
It’s also important to note that SHOP currently trades at a PEG ratio of 2.31. 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. The Internet – Services industry had an average PEG ratio of 1.67 as trading concluded yesterday.
The Internet – Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 181, finds itself in the bottom 27% echelons of all 250+ industries.
