In the latest trading session, Paypal (PYPL) closed at $90.62, marking a -0.13% move from the previous day. The stock lagged the S&P 500's daily loss of 0.04%. Meanwhile, the Dow gained 0.33%, and the Nasdaq, a tech-heavy index, lost 0.51%.
Prior to today's trading, shares of the technology platform and digital payments company had gained 3.69% over the past month. This has outpaced the Computer and Technology sector's gain of 2.29% and the S&P 500's gain of 2.79% in that time.
PYPL will be looking to display strength as it nears its next earnings release, which is expected to be October 18, 2018. The company is expected to report EPS of $0.54, up 17.39% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.67 billion, up 13.28% from the year-ago period.
PYPL's full-year Zacks Consensus Estimates are calling for earnings of $2.34 per share and revenue of $15.47 billion. These results would represent year-over-year changes of +23.16% and +18.16%, respectively.
Investors might also notice recent changes to analyst estimates for PYPL. 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 0.1% higher within the past month. PYPL is currently a Zacks Rank #3 (Hold).
Digging into valuation, PYPL currently has a Forward P/E ratio of 38.72. For comparison, its industry has an average Forward P/E of 69.74, which means PYPL is trading at a discount to the group.
Also, we should mention that PYPL has a PEG ratio of 2.18. 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. Internet - Software stocks are, on average, holding a PEG ratio of 4.04 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 92, which puts it in the top 36% 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.
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