Paypal (PYPL) Stock Sinks As Market Gains: What You Should Know
Paypal (PYPL) closed at $73.30 in the latest trading session, marking a -0.79% move from the prior day. This change lagged the S&P 500's daily gain of 0.17%. Elsewhere, the Dow gained 0.6%, while the tech-heavy Nasdaq added 0.67%.
Coming into today, shares of the technology platform and digital payments company had gained 0.45% in the past month. In that same time, the Computer and Technology sector gained 8.4%, while the S&P 500 gained 0.25%.
Paypal will be looking to display strength as it nears its next earnings release. On that day, Paypal is projected to report earnings of $1.08 per share, which would represent year-over-year growth of 22.73%. Meanwhile, our latest consensus estimate is calling for revenue of $6.97 billion, up 7.52% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.89 per share and revenue of $29.2 billion, which would represent changes of +18.4% and +6.12%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Paypal. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Within the past 30 days, our consensus EPS projection has moved 0.16% higher. Paypal is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Paypal has a Forward P/E ratio of 15.1 right now. This represents a discount compared to its industry's average Forward P/E of 42.48.
Also, we should mention that PYPL has a PEG ratio of 0.87. 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 1.6 based on yesterday's closing prices.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 63, which puts it in the top 25% 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.
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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