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

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Paypal (PYPL - Free Report) closed at $116.67 in the latest trading session, marking a +0.88% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.34%. Elsewhere, the Dow gained 0.4%, while the tech-heavy Nasdaq lost 0.47%.

Prior to today's trading, shares of the technology platform and digital payments company had gained 14.12% over the past month. This has outpaced the Computer and Technology sector's gain of 2.36% and the S&P 500's gain of 3.75% in that time.

Investors will be hoping for strength from Paypal as it approaches its next earnings release. In that report, analysts expect Paypal to post earnings of $1.12 per share. This would mark a year-over-year decline of 8.2%. Our most recent consensus estimate is calling for quarterly revenue of $6.41 billion, up 6.33% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.65 per share and revenue of $29.37 billion, which would represent changes of +1.09% and +15.75%, respectively, from the prior year.

Any recent changes to analyst estimates for Paypal 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.

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. The Zacks Consensus EPS estimate has moved 0.06% higher within the past month. Paypal is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Paypal is holding a Forward P/E ratio of 24.88. This valuation marks a discount compared to its industry's average Forward P/E of 47.78.

We can also see that PYPL currently has a PEG ratio of 1.37. 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 3.1 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 23% 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 Zacks.com.


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