In the latest trading session, Shopify (SHOP) closed at $107.64, marking a +0.81% move from the previous day. This move outpaced the S&P 500's daily gain of 0.16%. Elsewhere, the Dow saw an upswing of 0.25%, while the tech-heavy Nasdaq depreciated by 0.06%.
Shares of the cloud-based commerce company witnessed a loss of 5.88% over the previous month, trailing the performance of the Computer and Technology sector with its loss of 0.17% and the S&P 500's loss of 2.8%.
Analysts and investors alike will be keeping a close eye on the performance of Shopify in its upcoming earnings disclosure. 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, the latest consensus estimate predicts the revenue to be $2.72 billion, indicating a 27.03% increase compared to the same quarter of the previous year.
It is also important to note the recent changes 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 company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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. Within the past 30 days, our consensus EPS projection remained stagnant. Shopify is currently a Zacks Rank #2 (Buy).
In terms of valuation, Shopify is currently trading at a Forward P/E ratio of 71.13. This indicates a premium in contrast to its industry's Forward P/E of 23.26.
It's also important to note that SHOP currently trades at a PEG ratio of 1.67. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Internet - Services stocks are, on average, holding a PEG ratio of 1.58 based on yesterday's closing prices.
The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 42, this industry ranks in the top 17% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
