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Why the Market Dipped But Paypal (PYPL) Gained Today

Paypal (PYPL) closed at $59.80 in the latest trading session, marking a +1.15% move from the prior day. The stock's performance was ahead of the S&P 500's daily loss of 0.25%. Meanwhile, the Dow experienced a rise of 0.77%, and the technology-dominated Nasdaq saw a decrease of 0.79%.

Heading into today, shares of the technology platform and digital payments company had lost 4.94% over the past month, lagging the Computer and Technology sector's gain of 8.85% and the S&P 500's gain of 3.59% in that time.

The investment community will be paying close attention to the earnings performance of Paypal in its upcoming release. The company's upcoming EPS is projected at $0.95, signifying a 18.1% drop compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $7.78 billion, reflecting a 6.7% rise from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $4.14 per share and a revenue of $31.94 billion, signifying shifts of -18.82% and +7.28%, respectively, from the last year.

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Any recent changes to analyst estimates for Paypal should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Paypal is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Paypal is holding a Forward P/E ratio of 14.29. For comparison, its industry has an average Forward P/E of 29.43, which means Paypal is trading at a discount to the group.

We can also see that PYPL currently has a PEG ratio of 0.97. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Internet - Software stocks are, on average, holding a PEG ratio of 1.63 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 74, which puts it in the top 30% 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.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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

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Zacks Investment Research