Paypal (PYPL) Gains But Lags Market: What You Should Know
Paypal (PYPL) closed at $73.21 in the latest trading session, marking a +0.3% move from the prior day. This change lagged the S&P 500's 0.89% gain on the day. Meanwhile, the Dow gained 1.2%, and the Nasdaq, a tech-heavy index, lost 0.68%.
Prior to today's trading, shares of the technology platform and digital payments company had lost 2.24% over the past month. This has lagged the Computer and Technology sector's gain of 2.42% and was narrower than the S&P 500's loss of 3.9% in that time.
Investors will be hoping for strength from Paypal as it approaches its next earnings release. The company is expected to report EPS of $1.08, up 22.73% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.97 billion, up 7.52% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $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 might also notice recent changes to analyst estimates for Paypal. These recent revisions tend to reflect the evolving nature of short-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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.04% higher within the past month. Paypal is currently sporting a Zacks Rank of #3 (Hold).
Looking at its valuation, Paypal is holding a Forward P/E ratio of 14.91. Its industry sports an average Forward P/E of 41.28, so we one might conclude that Paypal is trading at a discount comparatively.
It is also worth noting that PYPL currently has a PEG ratio of 0.86. 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 - Software was holding an average PEG ratio of 1.62 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 66, which puts it in the top 27% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
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