Shopify Surpasses the Stock Market: Here's How

Shopify's Strong Performance and Future Outlook

In the most recent trading session, Shopify (SHOP) closed up 1.07% at $128.43. This performance outpaced the S&P 500, which saw a modest gain of 0.14% for the day. Meanwhile, the Dow Jones Industrial Average dipped by 0.04%, and the Nasdaq Composite, known for its tech-heavy composition, gained 0.38%.

Over the past month, Shopify’s shares have surged by 19.43%, significantly outperforming both the Computer and Technology sector, which rose 7.37%, and the broader S&P 500, which gained 5.35%. This strong showing highlights the company's continued dominance in the e-commerce space.

Investors are closely watching the upcoming earnings report from Shopify, set to be released on August 6, 2025. Analysts anticipate the company will report an EPS of $0.28, reflecting a 7.69% increase compared to the same quarter last year. Revenue is expected to reach $2.54 billion, marking a 24.25% growth from the previous year’s figures.

Looking ahead for the full year, the Zacks Consensus Estimates project earnings of $1.40 per share and revenue of $10.86 billion. These figures represent increases of 7.69% and 22.28%, respectively, compared to the prior year. Such projections underscore the company’s continued momentum and growth potential.

It’s also important for investors to pay attention to any recent changes in analyst estimates for Shopify. These revisions often reflect the latest business trends and can signal shifts in investor sentiment. Positive revisions typically indicate growing confidence in the company's ability to deliver strong results.

Research has shown that these estimate revisions can have a direct impact on stock price movements. To help investors capitalize on this insight, the Zacks Rank system was developed. This quantitative model incorporates estimate changes and provides a rating system ranging from #1 (Strong Buy) to #5 (Strong Sell).

The Zacks Rank has a proven track record, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate for Shopify remained stable, and the company currently holds a Zacks Rank of #1, indicating a strong buy recommendation.

When it comes to valuation, Shopify is currently trading at a Forward P/E ratio of 90.85. This is significantly higher than the industry average of 19.93, suggesting that the stock is trading at a premium relative to its peers.

Another key metric to consider is the PEG ratio, which adjusts the traditional P/E ratio by factoring in the company's expected earnings growth rate. Shopify currently has a PEG ratio of 4.7, compared to an industry average of 1.57 for the Internet - Services sector. This indicates that the stock may be overvalued based on its projected growth.

The Internet - Services industry, which includes Shopify, falls under the broader Computer and Technology sector. The industry currently holds a Zacks Industry Rank of 158, placing it in the bottom 37% of all 250+ industries. The Zacks Industry Rank evaluates the strength of industry groups by measuring the average Zacks Rank of individual stocks within them.

Studies have shown that the top 50% of rated industries tend to outperform the bottom half by a factor of 2 to 1. This suggests that investors should carefully evaluate the broader industry landscape when making investment decisions.

To stay informed about these and other stock-moving metrics, investors can use HAWXTECH to track real-time data and insights. This tool helps keep investors updated on key developments that could impact their portfolios.