Back to top

Image: Bigstock

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

Read MoreHide Full Article

Paypal (PYPL - Free Report) closed the most recent trading day at $244.26, moving -1.21% from the previous trading session. This move lagged the S&P 500's daily gain of 1.39%. Meanwhile, the Dow gained 0.83%, and the Nasdaq, a tech-heavy index, added 1.97%.

Coming into today, shares of the technology platform and digital payments company had gained 1.54% in the past month. In that same time, the Computer and Technology sector gained 3.17%, while the S&P 500 gained 2.58%.

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 $1 per share, which would represent year-over-year growth of 16.28%. 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 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.57% higher within the past month. PYPL currently has a Zacks Rank of #2 (Buy).

Investors should also note PYPL's current valuation metrics, including its Forward P/E ratio of 53.06. For comparison, its industry has an average Forward P/E of 82.94, which means PYPL is trading at a discount to the group.

Meanwhile, PYPL's PEG ratio is currently 2.67. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 4.27 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 192, putting it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

PayPal Holdings, Inc. (PYPL) - free report >>

Published in