Why the Market Dipped But Paypal (PYPL) Gained Today
Paypal (PYPL) closed the most recent trading day at $80.26, moving +1.13% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.96%. On the other hand, the Dow registered a loss of 0.94%, and the technology-centric Nasdaq decreased by 1.18%.
Shares of the technology platform and digital payments company have appreciated by 15.2% over the course of the past month, outperforming the Computer and Technology sector's gain of 7.35% and the S&P 500's gain of 4.3%.
The investment community will be closely monitoring the performance of Paypal in its forthcoming earnings report. In that report, analysts expect Paypal to post earnings of $1.06 per share. This would mark a year-over-year decline of 18.46%. Simultaneously, our latest consensus estimate expects the revenue to be $7.85 billion, showing a 5.8% escalation compared to the year-ago quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $4.42 per share and a revenue of $31.94 billion, indicating changes of -13.33% and +7.29%, respectively, from the former year.
Investors should also note any recent changes to analyst estimates for Paypal. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Currently, Paypal is carrying a Zacks Rank of #2 (Buy).
In terms of valuation, Paypal is presently being traded at a Forward P/E ratio of 17.97. Its industry sports an average Forward P/E of 30.53, so one might conclude that Paypal is trading at a discount comparatively.
Investors should also note that PYPL has a PEG ratio of 1.45 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 2.03.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 74, finds itself in the top 30% echelons of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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