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As the markets head higher after post-Brexit fears have been mostly calmed, investors are looking for stocks that could lead to solid gains during the markets run. Two sectors that have been of interest lately have been the mobile payment sector, as well as the ecommerce sector. Ebay Inc. (EBAY - Free Report) is in the ecommerce sector, and actually spun off PayPayl Holdings Inc. (PYPL - Free Report) , in a move that gave Ebay investors one share of PYPL for every one share they owned of EBAY.
EBAY is currently a Zacks Rank #2 (Buy), where has PYPL is currently a Zacks Rank #4 (Sell), and below is a comparison between the two companies, showing why EBAY is a better buy than PYPL.
Ebay Inc. is one of the largest online trading communities. The company creates a powerful marketplace for the sale of goods and services by a passionate community of individuals and small businesses. eBay enables trade on a local, national, and international basis with local sites in numerous markets in the U.S. and country-specific sites in the UK, Canada, Germany, Austria, France, Italy, Japan, Korea and Australia.
As mentioned, eBay is a Zacks Rank #2 (Buy), and it should be noted that it operates in an industry which is ranked in the top 40% of all industries by Zacks. The company also has a B for its Value Style Score, which is backed up by a PE ratio of 15.68, an earnings yield of 6.37%, and cash flow per share of 2.17.
EBay has also seen positive EPS estimate revision activity as of late both for the current quarter and for the current year, which has raised the consensus estimate for both time periods. Recently the stock was upgraded to “outperform” by an analyst from Baird, who gave the stock a price target of $30.
PayPal Holdings Inc. operates as a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide. It enables businesses of various sizes to accept payments from merchant websites, mobile devices, and applications, as well as at offline retail locations through a range of payment solutions, including PayPal, PayPal Credit, Braintree, Venmo, and Xoom products. The company’s platform allows customers to pay and get paid, transfer and withdraw funds to their bank accounts, and hold balances in their PayPal accounts in various currencies.
PayPal is currently a Zacks Rank #4 (Sell), and has a Value Style Score of a D. The low Style Score can be attributed to a high PE ratio of 31.97, cash flow per share of only 1.59, and a price to sales ratio of 4.45. Analysts have been lowering their EPS estimates for the company as of late, both for the current year and quarter. Estimates for next quarter and next year have been lowered recently as well.
Some analysts have voiced concerns over the company’s growth prospects, though it is projected to see sales growth of 15.6% this year. For the current quarter, the company has an earnings expected surprise of -6.67%, based on the difference between the Zacks Consensus Estimate being higher than the Most Accurate Estimate.
Bottom Line
Analysts revision activity and a stock’s Zacks Rank are great indicators for the way a stock is likely headed. When analysts lower their earnings estimates, they are likely losing excitement in the stock’s returns, but on the other hand, when they raise estimates, they become more bullish on the stock. With eBay’s higher Zacks Rank, better Value Style Score, and rising EPS estimates, right now it’s looking like the better buy when compared with PayPal, which has a lower Zacks Rank, decreasing EPS estimates, and a more expensive relative price tag.
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Is Ebay Now A Better Buy Than PayPal?
As the markets head higher after post-Brexit fears have been mostly calmed, investors are looking for stocks that could lead to solid gains during the markets run. Two sectors that have been of interest lately have been the mobile payment sector, as well as the ecommerce sector. Ebay Inc. (EBAY - Free Report) is in the ecommerce sector, and actually spun off PayPayl Holdings Inc. (PYPL - Free Report) , in a move that gave Ebay investors one share of PYPL for every one share they owned of EBAY.
EBAY is currently a Zacks Rank #2 (Buy), where has PYPL is currently a Zacks Rank #4 (Sell), and below is a comparison between the two companies, showing why EBAY is a better buy than PYPL.
Ebay Inc. (EBAY - Free Report)
Ebay Inc. is one of the largest online trading communities. The company creates a powerful marketplace for the sale of goods and services by a passionate community of individuals and small businesses. eBay enables trade on a local, national, and international basis with local sites in numerous markets in the U.S. and country-specific sites in the UK, Canada, Germany, Austria, France, Italy, Japan, Korea and Australia.
As mentioned, eBay is a Zacks Rank #2 (Buy), and it should be noted that it operates in an industry which is ranked in the top 40% of all industries by Zacks. The company also has a B for its Value Style Score, which is backed up by a PE ratio of 15.68, an earnings yield of 6.37%, and cash flow per share of 2.17.
EBay has also seen positive EPS estimate revision activity as of late both for the current quarter and for the current year, which has raised the consensus estimate for both time periods. Recently the stock was upgraded to “outperform” by an analyst from Baird, who gave the stock a price target of $30.
PayPal Holdings Inc. (PYPL - Free Report)
PayPal Holdings Inc. operates as a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide. It enables businesses of various sizes to accept payments from merchant websites, mobile devices, and applications, as well as at offline retail locations through a range of payment solutions, including PayPal, PayPal Credit, Braintree, Venmo, and Xoom products. The company’s platform allows customers to pay and get paid, transfer and withdraw funds to their bank accounts, and hold balances in their PayPal accounts in various currencies.
PayPal is currently a Zacks Rank #4 (Sell), and has a Value Style Score of a D. The low Style Score can be attributed to a high PE ratio of 31.97, cash flow per share of only 1.59, and a price to sales ratio of 4.45. Analysts have been lowering their EPS estimates for the company as of late, both for the current year and quarter. Estimates for next quarter and next year have been lowered recently as well.
Some analysts have voiced concerns over the company’s growth prospects, though it is projected to see sales growth of 15.6% this year. For the current quarter, the company has an earnings expected surprise of -6.67%, based on the difference between the Zacks Consensus Estimate being higher than the Most Accurate Estimate.
Bottom Line
Analysts revision activity and a stock’s Zacks Rank are great indicators for the way a stock is likely headed. When analysts lower their earnings estimates, they are likely losing excitement in the stock’s returns, but on the other hand, when they raise estimates, they become more bullish on the stock. With eBay’s higher Zacks Rank, better Value Style Score, and rising EPS estimates, right now it’s looking like the better buy when compared with PayPal, which has a lower Zacks Rank, decreasing EPS estimates, and a more expensive relative price tag.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>