Shopify (SHOP) ended the recent trading session at $126.79, demonstrating a -5.45% change from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily loss of 0.48%. At the same time, the Dow lost 0.77%, and the tech-heavy Nasdaq lost 0.64%.
Coming into today, shares of the cloud-based commerce company had lost 12.13% in the past month. In that same time, the Computer and Technology sector gained 0.4%, while the S&P 500 lost 0.97%.
The investment community will be paying close attention to the earnings performance of Shopify in its upcoming release. In that report, analysts expect Shopify to post earnings of $0.44 per share. This would mark year-over-year growth of 29.41%. Meanwhile, our latest consensus estimate is calling for revenue of $3.73 billion, up 31.22% from the prior-year quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.89 per share and a revenue of $15.18 billion, representing changes of +61.54% and +31.33%, respectively, from the prior year.
Investors should also pay attention to any latest changes in analyst estimates for Shopify. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent 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.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.1% higher. Shopify is currently a Zacks Rank #3 (Hold).
In terms of valuation, Shopify is presently being traded at a Forward P/E ratio of 71.08. This expresses a premium compared to the average Forward P/E of 16.04 of its industry.
It's also important to note that SHOP currently trades at a PEG ratio of 2.11. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 1.55 at yesterday's closing price.
The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 196, putting it in the bottom 21% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Shopify Inc. (SHOP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).