Shopify (SHOP) Gains But Lags Market: What You Should Know

Shopify (SHOP) closed at $418 in the latest trading session, marking a +0.84% move from the prior day. This change lagged the S&P 500's 1.45% gain on the day. At the same time, the Dow added 1.22%, and the tech-heavy Nasdaq gained 0.78%.

Heading into today, shares of the cloud-based commerce company had lost 1.85% over the past month, outpacing the Computer and Technology sector's loss of 5.61% and the S&P 500's loss of 7.42% in that time.

Wall Street will be looking for positivity from SHOP as it approaches its next earnings report date. In that report, analysts expect SHOP to post earnings of -$0.17 per share. This would mark a year-over-year decline of 288.89%. Our most recent consensus estimate is calling for quarterly revenue of $445.38 million, up 38.97% from the year-ago period.

SHOP's full-year Zacks Consensus Estimates are calling for earnings of $0.13 per share and revenue of $2.11 billion. These results would represent year-over-year changes of -56.67% and +33.58%, respectively.

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 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. 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. Over the past month, the Zacks Consensus EPS estimate has moved 2.91% lower. SHOP is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, SHOP is currently trading at a Forward P/E ratio of 3228.27. Its industry sports an average Forward P/E of 26.21, so we one might conclude that SHOP is trading at a premium comparatively.

Also, we should mention that SHOP has a PEG ratio of 124.91. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SHOP's industry had an average PEG ratio of 2.43 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 41, putting it in the top 17% of all 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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