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Paypal (PYPL) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Paypal (PYPL) closed at $99.89, marking a +0.56% move from the previous day. This move lagged the S&P 500's daily gain of 0.91%. Meanwhile, the Dow gained 0.7%, and the Nasdaq, a tech-heavy index, added 1.02%.

Prior to today's trading, shares of the technology platform and digital payments company had lost 3.61% over the past month. This has lagged the Computer and Technology sector's loss of 2.58% and the S&P 500's loss of 2.74% in that time.

Wall Street will be looking for positivity from PYPL as it approaches its next earnings report date. In that report, analysts expect PYPL to post earnings of $0.70 per share. This would mark year-over-year growth of 20.69%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.34 billion, up 17.88% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.14 per share and revenue of $17.72 billion. These totals would mark changes of +29.75% and +14.66%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for PYPL. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.06% lower. PYPL is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note PYPL's current valuation metrics, including its Forward P/E ratio of 31.65. This represents a discount compared to its industry's average Forward P/E of 54.39.

Investors should also note that PYPL has a PEG ratio of 1.72 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 2.62 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 90, which puts it in the top 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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