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.
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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