Shopify (SHOP) closed at $1,463.31 in the latest trading session, marking a +0.06% move from the prior day. The stock lagged the S&P 500’s daily gain of 0.17%. Elsewhere, the Dow lost 0.02%, while the tech-heavy Nasdaq added 0.38%.
Prior to today’s trading, shares of the cloud-based commerce company had gained 21.89% over the past month. This has outpaced the Computer and Technology sector’s gain of 8.01% and the S&P 500’s gain of 2.33% in that time.
Wall Street will be looking for positivity from SHOP as it approaches its next earnings report date. This is expected to be February 17, 2021. On that day, SHOP is projected to report earnings of $1.21 per share, which would represent year-over-year growth of 181.4%. Meanwhile, our latest consensus estimate is calling for revenue of $906.82 million, up 79.51% from the prior-year quarter.
It is also important to note the recent changes to analyst estimates for SHOP. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
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 has moved 2.4% higher. SHOP currently has a Zacks Rank of #1 (Strong Buy).
In terms of valuation, SHOP is currently trading at a Forward P/E ratio of 402.24. For comparison, its industry has an average Forward P/E of 36.3, which means SHOP is trading at a premium to the group.
Meanwhile, SHOP’s PEG ratio is currently 12.38. 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. Internet – Services stocks are, on average, holding a PEG ratio of 3.08 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 116, which puts it in the top 46% 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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