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

Paypal (PYPL) closed at $82.91 in the latest trading session, marking a +1.74% move from the prior day. This move outpaced the S&P 500's daily gain of 1.05%. Meanwhile, the Dow gained 0.02%, and the Nasdaq, a tech-heavy index, added 9.7%.

Prior to today's trading, shares of the technology platform and digital payments company had gained 9.27% over the past month. This has lagged the Computer and Technology sector's gain of 11.44% and outpaced the S&P 500's gain of 6.27% in that time.

Investors will be hoping for strength from Paypal as it approaches its next earnings release, which is expected to be February 9, 2023. The company is expected to report EPS of $1.19, up 7.21% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $7.39 billion, up 6.85% from the year-ago period.

Investors might also notice recent changes to analyst estimates for Paypal. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.41% lower. Paypal currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Paypal is holding a Forward P/E ratio of 17.07. This represents a discount compared to its industry's average Forward P/E of 42.65.

Also, we should mention that PYPL has a PEG ratio of 1.09. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 2.31 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 80, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report

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