In the latest trading session, Paypal (PYPL) closed at $250.35, marking a -1.37% move from the previous day. This move lagged the S&P 500’s daily gain of 0.1%. Elsewhere, the Dow gained 0.9%, while the tech-heavy Nasdaq lost 0.59%.
Heading into today, shares of the technology platform and digital payments company had lost 10.95% over the past month, lagging the Computer and Technology sector’s loss of 5.38% and the S&P 500’s gain of 0.71% in that time.
Investors will be hoping for strength from PYPL as it approaches its next earnings release. In that report, analysts expect PYPL to post earnings of $1.01 per share. This would mark year-over-year growth of 53.03%. Our most recent consensus estimate is calling for quarterly revenue of $5.9 billion, up 27.73% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.57 per share and revenue of $25.66 billion. These totals would mark changes of +17.78% and +19.63%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for PYPL. 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.
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.
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 0.12% higher within the past month. PYPL is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, PYPL is currently trading at a Forward P/E ratio of 55.51. This valuation marks a discount compared to its industry’s average Forward P/E of 75.4.
Also, we should mention that PYPL has a PEG ratio of 2.58. 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. PYPL’s industry had an average PEG ratio of 4.02 as of yesterday’s close.
The Internet – Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 175, which puts it in the bottom 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.
To follow PYPL in the coming trading sessions, be sure to utilize Zacks.com.