The latest trading session saw Shopify (SHOP – Free Report) ending at $117.41, denoting a -0.99% adjustment from its last day’s close. This move lagged the S&P 500’s daily loss of 0.95%. Elsewhere, the Dow lost 0.99%, while the tech-heavy Nasdaq lost 1.36%.
Coming into today, shares of the cloud-based commerce company had gained 10.16% in the past month. In that same time, the Computer and Technology sector lost 1.55%, while the S&P 500 gained 1.86%.
The investment community will be paying close attention to the earnings performance of Shopify in its upcoming release. The company is slated to reveal its earnings on February 11, 2025. The company’s upcoming EPS is projected at $0.44, signifying a 29.41% increase compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $2.72 billion, up 27.02% from the prior-year quarter.
Investors should also note any recent changes to analyst estimates for Shopify. Recent revisions tend to reflect the latest near-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. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.06% downward. Shopify is currently a Zacks Rank #3 (Hold).
Investors should also note Shopify’s current valuation metrics, including its Forward P/E ratio of 78.72. This valuation marks a premium compared to its industry’s average Forward P/E of 23.4.
We can also see that SHOP currently has a PEG ratio of 1.85. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. The Internet – Services industry had an average PEG ratio of 1.74 as trading concluded yesterday.
The Internet – Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 81, finds itself in the top 33% echelons 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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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