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Paypal (PYPL) Gains But Lags Market: What You Should Know

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Paypal (PYPL - Free Report) closed at $282.43 in the latest trading session, marking a +0.07% move from the prior day. This change lagged the S&P 500's 0.85% gain on the day.

Heading into today, shares of the technology platform and digital payments company had gained 4.11% over the past month, outpacing the Computer and Technology sector's gain of 1.96% and the S&P 500's loss of 0.37% in that time.

Wall Street will be looking for positivity from PYPL as it approaches its next earnings report date. On that day, PYPL is projected to report earnings of $1.07 per share, which would represent no growth from the year-ago period. Meanwhile, our latest consensus estimate is calling for revenue of $6.22 billion, up 13.96% from the prior-year quarter.

PYPL's full-year Zacks Consensus Estimates are calling for earnings of $4.73 per share and revenue of $25.77 billion. These results would represent year-over-year changes of +21.91% and +20.1%, respectively.

Investors should also note any recent changes to analyst estimates for PYPL. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. PYPL is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, PYPL currently has a Forward P/E ratio of 59.72. This represents a premium compared to its industry's average Forward P/E of 59.7.

It is also worth noting that PYPL currently has a PEG ratio of 2.75. 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 3.87 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 203, which puts it in the bottom 21% 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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