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Paypal (PYPL) Dips More Than Broader Markets: What You Should Know

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Zacks Equity Research
·3-min read
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Paypal (PYPL) closed at $262.27 in the latest trading session, marking a -0.99% move from the prior day. This move lagged the S&P 500's daily loss of 0.92%.

Coming into today, shares of the technology platform and digital payments company had gained 8.48% in the past month. In that same time, the Computer and Technology sector gained 9.54%, while the S&P 500 gained 6.83%.

Wall Street will be looking for positivity from PYPL as it approaches its next earnings report date. This is expected to be May 5, 2021. In that report, analysts expect PYPL to post earnings of $1.01 per share. This would mark year-over-year growth of 53.03%. Meanwhile, our latest consensus estimate is calling for revenue of $5.9 billion, up 27.73% from the prior-year quarter.

PYPL's full-year Zacks Consensus Estimates are calling for earnings of $4.57 per share and revenue of $25.66 billion. These results would represent year-over-year changes of +17.78% and +19.63%, respectively.

Investors should also note any recent changes to analyst estimates for PYPL. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. PYPL is currently sporting a Zacks Rank of #4 (Sell).

Investors should also note PYPL's current valuation metrics, including its Forward P/E ratio of 57.83. This valuation marks a discount compared to its industry's average Forward P/E of 75.37.

Meanwhile, PYPL's PEG ratio is currently 2.69. 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. Internet - Software stocks are, on average, holding a PEG ratio of 4.03 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 189, which puts it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

To follow PYPL in the coming trading sessions, be sure to utilize Zacks.com.


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