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

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Shopify (SHOP - Free Report) closed the most recent trading day at $391.90, moving +1.4% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.3%. Elsewhere, the Dow gained 1.41%, while the tech-heavy Nasdaq added 1.75%.

Heading into today, shares of the cloud-based commerce company had gained 13.24% over the past month, outpacing the Computer and Technology sector's loss of 0.14% and the S&P 500's gain of 0.46% in that time.

SHOP will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.11, up 175% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $384.06 million, up 42.21% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.62 per share and revenue of $1.54 billion, which would represent changes of +63.16% and +43.46%, respectively, from the prior year.

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

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 1.41% higher. SHOP is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, SHOP is holding a Forward P/E ratio of 621.55. For comparison, its industry has an average Forward P/E of 26.51, which means SHOP is trading at a premium to the group.

It is also worth noting that SHOP currently has a PEG ratio of 26.26. 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. Internet - Services stocks are, on average, holding a PEG ratio of 2.61 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 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.

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


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