Paypal (PYPL – Free Report) closed at $86.18 in the latest trading session, marking a +0.97% move from the prior day. The stock’s change was more than the S&P 500’s daily loss of 0.22%. Meanwhile, the Dow experienced a drop of 0.36%, and the technology-dominated Nasdaq saw a decrease of 0.16%.
The technology platform and digital payments company’s shares have seen a decrease of 4.46% over the last month, not keeping up with the Computer and Technology sector’s gain of 1.86% and the S&P 500’s loss of 2.36%.
The investment community will be closely monitoring the performance of Paypal in its forthcoming earnings report. The company’s earnings per share (EPS) are projected to be $1.11, reflecting a 25% decrease from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.23 billion, up 2.56% from the year-ago period.
It’s also important for investors to be aware of any recent modifications to analyst estimates for Paypal. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.05% decrease. Paypal presently features a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Paypal has a Forward P/E ratio of 17.4 right now. This expresses a discount compared to the average Forward P/E of 27.8 of its industry.
One should further note that PYPL currently holds a PEG ratio of 1.45. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. Internet – Software stocks are, on average, holding a PEG ratio of 2.03 based on yesterday’s closing prices.
The Internet – Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 26, placing it within the top 11% of over 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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