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

Zacks Equity Research
·3 mins read

Paypal (PYPL) closed at $197.03 in the latest trading session, marking a +1.3% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.83%. At the same time, the Dow added 1.2%, and the tech-heavy Nasdaq gained 0.74%.

Coming into today, shares of the technology platform and digital payments company had lost 6.91% in the past month. In that same time, the Computer and Technology sector lost 5.53%, while the S&P 500 lost 4.83%.

Wall Street will be looking for positivity from PYPL as it approaches its next earnings report date. On that day, PYPL is projected to report earnings of $0.94 per share, which would represent year-over-year growth of 54.1%. Our most recent consensus estimate is calling for quarterly revenue of $5.40 billion, up 23.36% from the year-ago period.

PYPL's full-year Zacks Consensus Estimates are calling for earnings of $3.74 per share and revenue of $21.36 billion. These results would represent year-over-year changes of +20.65% and +20.21%, respectively.

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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate has moved 1.14% higher within the past month. PYPL is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that PYPL has a Forward P/E ratio of 52 right now. This represents a discount compared to its industry's average Forward P/E of 78.58.

Also, we should mention that PYPL has a PEG ratio of 2.42. 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 6.41 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 188, which puts it in the bottom 26% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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Zacks Investment Research