Shopify (SHOP) closed the most recent trading day at $321.97, moving +0.3% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.12%. Elsewhere, the Dow lost 0.08%, while the tech-heavy Nasdaq added 0.54%.
Heading into today, shares of the cloud-based commerce company had gained 4.65% over the past month, lagging the Computer and Technology sector's gain of 5.12% and outpacing the S&P 500's gain of 3.68% in that time.
Investors will be hoping for strength from SHOP as it approaches its nex t earnings release. The company is expected to report EPS of $0.03, up 50% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $350.60 million, up 43.12% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.58 per share and revenue of $1.51 billion, which would represent changes of +52.63% and +40.75%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for SHOP. Recent revisions tend to reflect the latest near-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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.91% higher. SHOP is currently a Zacks Rank #3 (Hold).
Investors should also note SHOP's current valuation metrics, including its Forward P/E ratio of 555.84. Its industry sports an average Forward P/E of 29.15, so we one might conclude that SHOP is trading at a premium comparatively.
Meanwhile, SHOP's PEG ratio is currently 23.49. 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. Internet - Services stocks are, on average, holding a PEG ratio of 2.79 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 95, which puts it in the top 38% 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.
To follow SHOP in the coming trading sessions, be sure to utilize Zacks.com.
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