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

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Paypal (PYPL - Free Report) closed the most recent trading day at $188.51, moving -1.69% from the previous trading session. This move lagged the S&P 500's daily gain of 0.96%. At the same time, the Dow added 0.61%, and the tech-heavy Nasdaq lost 0.04%.

Coming into today, shares of the technology platform and digital payments company had lost 5.09% in the past month. In that same time, the Computer and Technology sector lost 1.81%, while the S&P 500 lost 0.21%.

Wall Street will be looking for positivity from Paypal as it approaches its next earnings report date. In that report, analysts expect Paypal to post earnings of $1.12 per share. This would mark year-over-year growth of 3.7%. Our most recent consensus estimate is calling for quarterly revenue of $6.89 billion, up 12.68% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.62 per share and revenue of $25.35 billion. These totals would mark changes of +19.07% and +18.14%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Paypal. Recent revisions tend to reflect the latest near-term business trends. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate has moved 0.43% higher within the past month. Paypal is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Paypal has a Forward P/E ratio of 41.52 right now. Its industry sports an average Forward P/E of 62.37, so we one might conclude that Paypal is trading at a discount comparatively.

We can also see that PYPL currently has a PEG ratio of 2.11. 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 3.6 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 195, which puts it in the bottom 24% 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.

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


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