In the latest trading session, Paypal (PYPL) closed at $113.04, marking a +0.49% move from the previous day. The stock outpaced the S&P 500’s daily gain of 0.43%. Meanwhile, the Dow gained 0.25%, and the Nasdaq, a tech-heavy index, lost 0.09%.
Heading into today, shares of the technology platform and digital payments company had gained 12.24% over the past month, outpacing the Computer and Technology sector’s gain of 3.3% and the S&P 500’s gain of 3.69% in that time.
Wall Street will be looking for positivity from Paypal as it approaches its next earnings report date. In that report, analysts expect Paypal to post earnings of $0.88 per share. This would mark a year-over-year decline of 27.87%. Our most recent consensus estimate is calling for quarterly revenue of $6.41 billion, up 6.29% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.64 per share and revenue of $29.35 billion. These totals would mark changes of +0.87% and +15.69%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Paypal. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.08% lower. Paypal currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Paypal has a Forward P/E ratio of 24.22 right now. For comparison, its industry has an average Forward P/E of 52.25, which means Paypal is trading at a discount to the group.
Investors should also note that PYPL has a PEG ratio of 1.34 right now. 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. Internet – Software stocks are, on average, holding a PEG ratio of 3.13 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 181, which puts it in the bottom 29% 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.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.