Paypal (PYPL) Rises But Trails Market: What Investors Should Know

Paypal (PYPL) closed at $62.06 in the latest trading session, marking a 0.52% move from the prior day. The stock lagged the S&P 500's daily gain of 1.03%. On the other hand, the Dow registered a gain of 0.87%, and the technology-centric Nasdaq increased by 1.26%.

Shares of the technology platform and digital payments company have appreciated by 9.58% over the course of the past month, outperforming the Computer and Technology sector's gain of 2.42% and the S&P 500's gain of 3.01%.

Market participants will be closely following the financial results of Paypal in its upcoming release. In that report, analysts expect Paypal to post earnings of $1.36 per share. This would mark year-over-year growth of 9.68%. Simultaneously, our latest consensus estimate expects the revenue to be $7.88 billion, showing a 6.75% escalation compared to the year-ago quarter.

It is also important to note the recent changes to analyst estimates for Paypal. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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. Within the past 30 days, our consensus EPS projection has moved 0.1% higher. Paypal currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Paypal has a Forward P/E ratio of 12.4 right now. This valuation marks a discount compared to its industry's average Forward P/E of 38.68.

Meanwhile, PYPL's PEG ratio is currently 0.77. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 1.78.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 26, putting it in the top 11% of all 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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