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Paypal (PYPL) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Paypal (PYPL - Free Report) closed at $242.06, marking a -1.16% move from the previous day. This change lagged the S&P 500's 0.38% loss on the day. Meanwhile, the Dow lost 0.22%, and the Nasdaq, a tech-heavy index, lost 0.12%.

Heading into today, shares of the technology platform and digital payments company had gained 6.39% over the past month, outpacing the Computer and Technology sector's gain of 4.43% and the S&P 500's gain of 4.12% in that time.

Wall Street will be looking for positivity from PYPL as it approaches its next earnings report date. The company is expected to report EPS of $1, up 16.28% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.07 billion, up 22.28% from the year-ago period.

Any recent changes to analyst estimates for PYPL should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.57% higher. PYPL is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, PYPL is holding a Forward P/E ratio of 54.19. Its industry sports an average Forward P/E of 86.84, so we one might conclude that PYPL is trading at a discount comparatively.

We can also see that PYPL currently has a PEG ratio of 2.73. 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. PYPL's industry had an average PEG ratio of 4.28 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 181, putting it in the bottom 30% 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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