Why Shopify (SHOP) Outpaced the Stock Market Today
In the latest market close, Shopify (SHOP) reached $83.41, with a +1.01% movement compared to the previous day. The stock's change was more than the S&P 500's daily gain of 0.71%. Meanwhile, the Dow gained 1.03%, and the Nasdaq, a tech-heavy index, added 0.6%.
Coming into today, shares of the cloud-based commerce company had gained 21.14% in the past month. In that same time, the Computer and Technology sector gained 9.96%, while the S&P 500 gained 6.41%.
The upcoming earnings release of Shopify will be of great interest to investors. In that report, analysts expect Shopify to post earnings of $0.27 per share. This would mark year-over-year growth of 12.5%. Alongside, our most recent consensus estimate is anticipating revenue of $2.11 billion, indicating a 22.95% upward movement from the same quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.12 per share and a revenue of $8.62 billion, indicating changes of +51.35% and +22.16%, respectively, from the former year.
Investors should also pay attention to any latest changes in analyst estimates for Shopify. These recent revisions tend to reflect the evolving nature of short-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 exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Shopify currently has a Zacks Rank of #1 (Strong Buy).
Investors should also note Shopify's current valuation metrics, including its Forward P/E ratio of 73.99. This indicates a premium in contrast to its industry's Forward P/E of 33.93.
One should further note that SHOP currently holds a PEG ratio of 1.89. 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. The Internet - Services industry currently had an average PEG ratio of 2.23 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 101, putting it in the top 41% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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Shopify Inc. (SHOP) : Free Stock Analysis Report
