Shop Stock: Shopify (SHOP) Gains As Market Dips: What You Should Know – June 18, 2021
In the latest trading session, Shopify (SHOP – Free Report) closed at $1,466.87, marking a +1.21% move from the previous day. This move outpaced the S&P 500’s daily loss of 1.31%.
Coming into today, shares of the cloud-based commerce company had gained 19.29% in the past month. In that same time, the Computer and Technology sector gained 7.7%, while the S&P 500 gained 1.56%.
Investors will be hoping for strength from SHOP as it approaches its next earnings release. In that report, analysts expect SHOP to post earnings of $0.98 per share. This would mark a year-over-year decline of 6.67%. Meanwhile, our latest consensus estimate is calling for revenue of $1.03 billion, up 43.98% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.39 per share and revenue of $4.36 billion, which would represent changes of +10.3% and +48.69%, respectively, from the prior year.
Any recent changes to analyst estimates for SHOP should also be noted by investors. 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. SHOP currently has a Zacks Rank of #3 (Hold).
Investors should also note SHOP’s current valuation metrics, including its Forward P/E ratio of 330.15. This valuation marks a premium compared to its industry’s average Forward P/E of 28.52.
It is also worth noting that SHOP currently has a PEG ratio of 13.21. 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 2.06 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 193, which puts it in the bottom 25% 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.