In the latest market close, Shopify (NYSE:SHOP) reached $65.45, with a +1.03% movement compared to the previous day. The stock's performance was ahead of the S&P 500's daily gain of 0.16%. Meanwhile, the Dow gained 0.04%, and the Nasdaq, a tech-heavy index, added 0.49%.
The cloud-based commerce company's shares have seen an increase of 11.32% over the last month, surpassing the Computer and Technology sector's gain of 5.94% and the S&P 500's gain of 3.22%.
The investment community will be closely monitoring the performance of Shopify in its forthcoming earnings report. The company's upcoming EPS is projected at $0.21, signifying a 50% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $2 billion, reflecting a 18.15% rise from the equivalent quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.99 per share and revenue of $8.51 billion. These totals would mark changes of +33.78% and +20.48%, respectively, from last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Shopify. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.51% increase. As of now, Shopify holds a Zacks Rank of #3 (Hold).
Digging into valuation, Shopify currently has a Forward P/E ratio of 65.51. This expresses a premium compared to the average Forward P/E of 22.81 of its industry.
We can additionally observe that SHOP currently boasts a PEG ratio of 2.02. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services industry had an average PEG ratio of 1.96 as trading concluded yesterday.
The Internet - Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 160, placing it within the bottom 37% of over 250 industries.
The Zacks Industry Rank gauges the strength of our 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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