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

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Paypal (PYPL - Free Report) closed at $100.27 in the latest trading session, marking a -0.46% move from the prior day. This change lagged the S&P 500's daily gain of 0.37%. Elsewhere, the Dow gained 0.25%, while the tech-heavy Nasdaq added 0.34%.

Coming into today, shares of the technology platform and digital payments company had gained 6.68% in the past month. In that same time, the Computer and Technology sector gained 4.35%, while the S&P 500 gained 1.83%.

Investors will be hoping for strength from PYPL as it approaches its next earnings release. On that day, PYPL is projected to report earnings of $0.67 per share, which would represent year-over-year growth of 17.54%. Our most recent consensus estimate is calling for quarterly revenue of $4.12 billion, up 11.85% from the year-ago period.

PYPL's full-year Zacks Consensus Estimates are calling for earnings of $2.88 per share and revenue of $18 billion. These results would represent year-over-year changes of +19.01% and +16.47%, respectively.

It is also important to note the recent changes to analyst estimates for PYPL. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PYPL is holding a Zacks Rank of #4 (Sell) right now.

Digging into valuation, PYPL currently has a Forward P/E ratio of 35.02. For comparison, its industry has an average Forward P/E of 59.21, which means PYPL is trading at a discount to the group.

Meanwhile, PYPL's PEG ratio is currently 1.96. 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 3.22 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 75, which puts it in the top 30% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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