Paypal (PYPL) records bigger fall than market: Important facts to note

The most recent trading session ended with Paypal (PYPL) at $60.64, reflecting a -1.47% change from the previous trading day’s close. The stock fell less than the S&P 500, which posted a loss of 0.04% on the day. Meanwhile, the Dow lost 0.15%, and the Nasdaq, a technology-heavy index, added 0.12%.

Coming into today, shares of the technology platform and digital payments company had lost 3.99% in the past month. At the same time, the Computers & Technology sector lost 2.27%, while the S&P 500 gained 4.15%.

Market participants will closely follow Paypal’s financial results in its next release. The company is expected to report EPS of $0.95, marking a decline of 18.1% compared to the same quarter a year ago. Meanwhile, our latest consensus estimate expects revenue to be $7.78 billion, indicating an escalation of 6.7% over the year-ago quarter.

For the full year, Zacks Consensus Estimates forecast earnings of $4.14 per share and revenue of $31.94 billion, which would represent changes of -18.82% and +7.28%, respectively, from the year passed.

It is also important for investors to be aware of any recent changes in analyst ratings for Paypal. These reviews usually reflect the latest short-term business trends, which can change frequently. As such, positive ratings revisions reflect analysts’ optimism about the company’s business and profitability.

Our research suggests that these changes in valuations have a direct correlation with future stock price performance. To take advantage of this, we’ve developed Zacks Rank, a proprietary model that takes these rating changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), maintains an admirable track record of independently audited outperformance, with the #1 stock contributing an average annual return of +25% since 1988. The Zacks EPS Consensus Estimate remained stagnant over the past month. Paypal currently carries a Zacks Rank of #3 (Hold).

In terms of valuation, Paypal is currently trading at a Forward P/E ratio of 14.88. This represents a discount compared to the average Forward P/E of 30.07 for its industry.

Meanwhile, PYPL’s PEG ratio currently stands at 1.01. This popular metric is similar to the widely known P/E ratio, with the difference that the PEG ratio also takes into account the company’s expected earnings growth rate. The average PEG ratio for the Internet – Software industry stood at 1.69 at the market close yesterday.

The Internet – Software industry is part of the Computers and Technology sector. Currently, this industry carries a Zacks Industry Rank of 77, placing it in the top 31% of over 250 industries.

The Zacks Industry Rank measures the strength of our individual industry groups by averaging the Zacks Ranks of the individual stocks within the groups. Our research shows that industries rated in the top 50% outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to stay up-to-date with all of these stock change metrics, among others, in the upcoming trading sessions.

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