Shopify (SHOP) Stock Sinks As Market Gains: What You Should Know

In the latest trading session, Shopify (SHOP) closed at $1,346.55, marking a -1.66% move from the previous day. This change lagged the S&P 500's 0.16% gain on the day.

Heading into today, shares of the cloud-based commerce company had lost 10.2% over the past month, lagging the Computer and Technology sector's loss of 4.96% and the S&P 500's loss of 3.32% in that time.

Wall Street will be looking for positivity from SHOP as it approaches its next earnings report date. In that report, analysts expect SHOP to post earnings of $1.21 per share. This would mark year-over-year growth of 7.08%. Our most recent consensus estimate is calling for quarterly revenue of $1.14 billion, up 48.94% from the year-ago period.

SHOP's full-year Zacks Consensus Estimates are calling for earnings of $6.72 per share and revenue of $4.61 billion. These results would represent year-over-year changes of +68.84% and +57.51%, respectively.

Investors might also notice recent changes to analyst estimates for SHOP. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. SHOP is currently sporting a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that SHOP has a Forward P/E ratio of 203.63 right now. For comparison, its industry has an average Forward P/E of 27.76, which means SHOP is trading at a premium to the group.

Investors should also note that SHOP has a PEG ratio of 7.4 right now. 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. Internet - Services stocks are, on average, holding a PEG ratio of 3.92 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 170, which puts it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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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.

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