Shopify (SHOP) Stock Sinks As Market Gains: What You Should Know
Shopify (SHOP) closed at $1,007.07 in the latest trading session, marking a -1.46% move from the prior day. This change lagged the S&P 500's 0.52% gain on the day. Elsewhere, the Dow gained 0.54%, while the tech-heavy Nasdaq added 0.19%.
Prior to today's trading, shares of the cloud-based commerce company had gained 11.23% over the past month. This has outpaced the Computer and Technology sector's gain of 7.19% and the S&P 500's gain of 4.79% in that time.
Wall Street will be looking for positivity from SHOP as it approaches its next earnings report date. This is expected to be October 29, 2020. In that report, analysts expect SHOP to post earnings of $0.49 per share. This would mark year-over-year growth of 276.92%. Meanwhile, our latest consensus estimate is calling for revenue of $656.09 million, up 67.99% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.47 per share and revenue of $2.62 billion. These totals would mark changes of +723.33% and +65.9%, respectively, from last year.
Any recent changes to analyst estimates for SHOP should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 74.11% higher. SHOP is currently sporting a Zacks Rank of #3 (Hold).
Investors should also note SHOP's current valuation metrics, including its Forward P/E ratio of 414.09. This valuation marks a premium compared to its industry's average Forward P/E of 37.18.
It is also worth noting that SHOP currently has a PEG ratio of 12.74. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. SHOP's industry had an average PEG ratio of 2.18 as of yesterday's close.
The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 198, which puts it in the bottom 22% 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.
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