Shopify (SHOP) Dips More Than Broader Markets: What You Should Know
Shopify (SHOP) closed at $52.93 in the latest trading session, marking a -1.31% move from the prior day. This change lagged the S&P 500's 1.04% loss on the day. Elsewhere, the Dow lost 0.38%, while the tech-heavy Nasdaq lost 5.88%.
Coming into today, shares of the cloud-based commerce company had gained 49.18% in the past month. In that same time, the Computer and Technology sector gained 18.95%, while the S&P 500 gained 8.97%.
Investors will be hoping for strength from Shopify as it approaches its next earnings release, which is expected to be February 15, 2023. On that day, Shopify is projected to report earnings of $0 per share, which would represent a year-over-year decline of 100%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.64 billion, up 18.87% from the year-ago period.
Investors might also notice recent changes to analyst estimates for Shopify. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. Within the past 30 days, our consensus EPS projection has moved 2.02% lower. Shopify is currently a Zacks Rank #3 (Hold).
Digging into valuation, Shopify currently has a Forward P/E ratio of 1298.85. This represents a premium compared to its industry's average Forward P/E of 24.67.
It is also worth noting that SHOP currently has a PEG ratio of 97.66. 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. The Internet - Services was holding an average PEG ratio of 1.86 at yesterday's closing price.
The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 156, which puts it in the bottom 39% 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 follow all of these stock-moving metrics, and many more, on Zacks.com.
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