Paypal (PYPL) Falls More Steeply Than Broader Market: What Investors Need to Know

Paypal (PYPL) closed at $44.21 in the latest trading session, marking a -2.81% move from the prior day. This change lagged the S&P 500's daily loss of 0.37%. Elsewhere, the Dow lost 0.18%, while the tech-heavy Nasdaq lost 0.84%.

The technology platform and digital payments company's shares have seen an increase of 3.27% over the last month, surpassing the Business Services sector's loss of 0.26% and the S&P 500's loss of 3.7%.

The investment community will be paying close attention to the earnings performance of Paypal in its upcoming release. The company is forecasted to report an EPS of $1.29, showcasing a 3.01% downward movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $8.13 billion, showing a 4.33% escalation compared to the year-ago quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $5.34 per share and a revenue of $34.19 billion, signifying shifts of +0.56% and +3.06%, respectively, from the last year.

Investors might also notice recent changes to analyst estimates for Paypal. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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 remained stagnant within the past month. Currently, Paypal is carrying a Zacks Rank of #4 (Sell).

With respect to valuation, Paypal is currently being traded at a Forward P/E ratio of 8.52. This expresses a discount compared to the average Forward P/E of 10.07 of its industry.

We can additionally observe that PYPL currently boasts a PEG ratio of 1.36. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. PYPL's industry had an average PEG ratio of 0.8 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 191, this industry ranks in the bottom 23% 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 Report

This article originally published on Zacks Investment Research (zacks.com).

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