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Paypal (PYPL) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 min read

Paypal (PYPL) closed at $236.45 in the latest trading session, marking a +0.4% move from the prior day. This move outpaced the S&P 500's daily loss of 0.35%. Meanwhile, the Dow lost 0.41%, and the Nasdaq, a tech-heavy index, lost 0.07%.

Prior to today's trading, shares of the technology platform and digital payments company had gained 23.37% over the past month. This has outpaced the Computer and Technology sector's gain of 6.18% and the S&P 500's gain of 3.21% in that time.

Investors will be hoping for strength from PYPL as it approaches its next earnings release. The company is expected to report EPS of $1, up 16.28% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.06 billion, up 22.25% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.80 per share and revenue of $21.40 billion, which would represent changes of +22.58% and +20.41%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for PYPL. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.19% higher. PYPL currently has a Zacks Rank of #3 (Hold).

Investors should also note PYPL's current valuation metrics, including its Forward P/E ratio of 61.96. For comparison, its industry has an average Forward P/E of 80.15, which means PYPL is trading at a discount to the group.

It is also worth noting that PYPL currently has a PEG ratio of 2.96. 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. PYPL's industry had an average PEG ratio of 6.01 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 177, putting it in the bottom 31% 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.

To follow PYPL in the coming trading sessions, be sure to utilize Zacks.com.


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