Earnings Growth & Price Strength Make Shopify (SHOP) a Stock to Watch

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Breaking Down the Zacks Focus List

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Focus List Methodology

When stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.

Brokerage analysts are in charge of determining a company's growth and profitability expectations, or earnings estimates. These analysts work together with company management to evaluate all factors that may affect future earnings, like interest rates, the economy, and sector and industry optimism.

What a company will earn down the road also needs to be taken into consideration, and this is why earnings estimate revisions are so important.

The stocks that receive positive changes to earnings estimates are more likely to receive even more upward changes in the future. Take this example: if an analyst raised their estimates last month, they'll probably do so again this month, and other analysts will follow.

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The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.

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Focus List Spotlight: Shopify (SHOP)

Ottawa, Canada-based Shopify Inc. provides a multi-tenant, cloud-based, multi-channel commerce platform that helps in starting, scaling, marketing, and running a business. Its platform and services are engineered for simplicity and reliability, while delivering a better shopping experience for customers everywhere.

On September 6, 2022, SHOP was added to the Focus List at $29.94 per share. Shares have increased 148.7% to $74.46 since then, and the company is a #3 (Hold) on the Zacks Rank.

For fiscal 2024, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.02 to $0.96. SHOP boasts an average earnings surprise of 82%.

Moreover, analysts are expecting SHOP's earnings to grow 29.7% for the current fiscal year.

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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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