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

Paypal (PYPL) closed at $117.14 in the latest trading session, marking a +0.83% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.09%. Elsewhere, the Dow gained 0.09%, while the tech-heavy Nasdaq added 0.62%.

Coming into today, shares of the technology platform and digital payments company had gained 2.02% in the past month. In that same time, the Computer and Technology sector gained 0.35%, while the S&P 500 gained 2.08%.

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 $0.69 per share, which would represent year-over-year growth of 18.97%. Meanwhile, our latest consensus estimate is calling for revenue of $4.33 billion, up 12.3% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.98 per share and revenue of $18 billion, which would represent changes of +23.14% and +16.51%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for PYPL. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. PYPL is currently a Zacks Rank #2 (Buy).

In terms of valuation, PYPL is currently trading at a Forward P/E ratio of 38.95. This valuation marks a discount compared to its industry's average Forward P/E of 62.28.

Also, we should mention that PYPL has a PEG ratio of 2.18. 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. The Internet - Software was holding an average PEG ratio of 2.59 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 85, putting it in the top 34% 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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