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

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In the latest trading session, Shopify (SHOP - Free Report) closed at $157.73, marking a -0.33% move from the previous day. This move lagged the S&P 500's daily gain of 0.76%. At the same time, the Dow added 0.67%, and the tech-heavy Nasdaq gained 0.71%.

Coming into today, shares of the cloud-based commerce company had gained 18.82% in the past month. In that same time, the Computer and Technology sector lost 0.35%, while the S&P 500 gained 0.75%.

Wall Street will be looking for positivity from SHOP as it approaches its next earnings report date. This is expected to be February 21, 2019. In that report, analysts expect SHOP to post earnings of $0.21 per share. This would mark year-over-year growth of 40%. Our most recent consensus estimate is calling for quarterly revenue of $327.13 million, up 46.82% from the year-ago period.

Investors should also note any recent changes to analyst estimates for SHOP. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 1.98% lower. SHOP is currently sporting a Zacks Rank of #5 (Strong Sell).

Looking at its valuation, SHOP is holding a Forward P/E ratio of 234.75. This valuation marks a premium compared to its industry's average Forward P/E of 27.07.

We can also see that SHOP currently has a PEG ratio of 9.92. 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 2.25 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 82, putting it in the top 33% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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