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Paypal (PYPL) Outpaces Stock Market Gains: What You Need to Know

BusinessPersonal FinancePaypal (PYPL) Outpaces Stock Market Gains: What You Need to Know
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Paypal (PYPL) closed at $75.84 in the latest trading session, up +1.24% from the previous day. The move outpaced the S&P 500’s daily gain of 0.14%. Meanwhile, the Dow lost 0.18% and the tech-heavy Nasdaq climbed 1.54%.

Early today, shares of the technology platform and digital payments company were down 10% in the past month. At the same time, the computer and technology sector declined 4.64%, while the S&P 500 declined 4.07%.

Investors will be watching for strength from Paypal as it nears its next earnings release. The company is expected to report EPS of $1.08, up 22.73% from the prior-year quarter. Our most recent Consensus Estimate is calling for quarterly revenue of $6.97 billion, up 7.52% from the year-ago period.

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Looking at the full year, our Zacks consensus estimates suggest that analysts expect $4.89 per share and revenue of $29.2 billion. These totals would mark changes of +18.4% and +6.12%, respectively, from last year.

Investors should pay close attention to any recent changes in analyst estimates for PayPal. These revisions help to reflect the ever-changing nature of near-term trading 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 in-team stock moves. To benefit from this, we developed Zacks Rank, a proprietary model that takes into account these estimation changes and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, externally-audited track record of success, with the #1 stock delivering an average annual return of +25% since 1988. Zacks’ Consensus EPS estimate has decreased by 0.08% within the past month. Paypal currently has a Zacks Rank #3 (Hold).

Investors should also pay attention to PayPal’s current valuation metrics, which include a forward P/E ratio of 15.33. This valuation marks a discount to its industry average forward P/E of 40.82.

We can also see that PYPL currently has a PEG ratio of 0.88. This metric is used in a similar way to the well-known P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The Internet – software industry currently has an average PEG ratio of 1.79 as of yesterday’s close.

Internet – The software industry is part of the computer and technology sector. The group has a Zacks Industry Rank of 80, placing it in the top 32% of all 250+ industries.

Zacks Industry Rank estimates the strength of our industry groups by measuring the average Zacks Rank of individual stocks within the groups. Our research shows that the top 50% of rated industries outperform the bottom half by a factor of 2 to 1.

To follow PYPL in the coming trading sessions, be sure to peruse Zacks.com.

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Click here to read this article on Zacks.com.

Jax Investment Research

The views and opinions expressed here are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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