Shopify (SHOP) closed at $119.46 in the latest trading session, marking a -1.78% move from the prior day. At the same time, the Dow added 1.14%, and the tech-heavy Nasdaq lost 0.8%.
The cloud-based commerce company’s stock has climbed by 7.69% in the past month, exceeding the Computer and Technology sector’s loss of 5.47% and the S&P 500’s loss of 1.43%.
The investment community will be paying close attention to the earnings performance of Shopify in its upcoming release. The company is predicted to post an EPS of $0.39, indicating a 11.43% growth compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $3.43 billion, indicating a 28.03% upward movement from the same quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.82 per share and revenue of $14.71 billion, indicating changes of +55.56% and +27.26%, respectively, compared to the previous year.
Investors should also note any recent changes to analyst estimates for Shopify. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, 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. Within the past 30 days, our consensus EPS projection remained stagnant. Shopify presently features a Zacks Rank of #3 (Hold).
Looking at its valuation, Shopify is holding a Forward P/E ratio of 66.75. Its industry sports an average Forward P/E of 15.33, so one might conclude that Shopify is trading at a premium comparatively.
It is also worth noting that SHOP currently has a PEG ratio of 2.55. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. By the end of yesterday’s trading, the Internet – Services industry had an average PEG ratio of 1.67.
The Internet – Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 108, putting it in the top 44% of all 250+ industries.
