In the latest trading session, Paypal (PYPL) closed at $78.34, marking a +0.86% move from the previous day. The stock exceeded the S&P 500, which registered a gain of 0.25% for the day. At the same time, the Dow added 0.2%, and the tech-heavy Nasdaq gained 0.56%.
Coming into today, shares of the technology platform and digital payments company had gained 7.82% in the past month. In that same time, the Computer and Technology sector lost 0.11%, while the S&P 500 gained 1.65%.
Market participants will be closely following the financial results of Paypal in its upcoming release. The company’s upcoming EPS is projected at $1.06, signifying a 18.46% drop compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $7.85 billion, up 5.8% from the prior-year quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $4.42 per share and a revenue of $31.94 billion, indicating changes of -13.33% and +7.29%, respectively, from the former year.
Any recent changes to analyst estimates for Paypal should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts’ positivity towards the company’s business operations and its ability to generate profits.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Paypal presently features a Zacks Rank of #1 (Strong Buy).
In terms of valuation, Paypal is presently being traded at a Forward P/E ratio of 17.58. For comparison, its industry has an average Forward P/E of 31.07, which means Paypal is trading at a discount to the group.
One should further note that PYPL currently holds a PEG ratio of 1.11. 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. As of the close of trade yesterday, the Internet – Software industry held an average PEG ratio of 2.05.
The Internet – Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 73, finds itself in the top 29% echelons of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
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