In the latest trading session, Paypal (PYPL) closed at $58.51, marking a -2.18% move from the previous day. The stock's performance was behind the S&P 500's daily loss of 0.34%. Elsewhere, the Dow lost 0.94%, while the tech-heavy Nasdaq added 0.16%.
Shares of the technology platform and digital payments company have depreciated by 1.6% over the course of the past month, underperforming the Business Services sector's gain of 2.46%, and the S&P 500's gain of 1.19%.
The investment community will be closely monitoring the performance of Paypal in its forthcoming earnings report. In that report, analysts expect Paypal to post earnings of $1.29 per share. This would mark year-over-year growth of 8.4%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.81 billion, up 5.31% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.34 per share and revenue of $33.29 billion, indicating changes of +14.84% and 0%, respectively, compared to the previous year.
It is also important to note the recent changes to analyst estimates for Paypal. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
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.
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. Within the past 30 days, our consensus EPS projection remained stagnant. Paypal is currently a Zacks Rank #3 (Hold).
From a valuation perspective, Paypal is currently exchanging hands at a Forward P/E ratio of 10.21. This signifies a discount in comparison to the average Forward P/E of 12.8 for its industry.
It's also important to note that PYPL currently trades at a PEG ratio of 0.74. 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 Financial Transaction Services was holding an average PEG ratio of 0.93 at yesterday's closing price.
The Financial Transaction Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 171, this industry ranks in the bottom 31% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow PYPL in the coming trading sessions, be sure to utilize Zacks.com.
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PayPal Holdings, Inc. (PYPL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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