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Paypal (PYPL) Sees a More Significant Dip Than Broader Market: Some Facts to Know

The latest trading session saw Paypal (PYPL) ending at $63.51, denoting a -1.67% adjustment from its last day's close. The stock fell short of the S&P 500, which registered a loss of 1.2% for the day. Meanwhile, the Dow lost 0.65%, and the Nasdaq, a tech-heavy index, lost 1.79%.

Shares of the technology platform and digital payments company witnessed a gain of 2.77% over the previous month, beating the performance of the Computer and Technology sector with its loss of 0.51% and the S&P 500's loss of 0.85%.

Market participants will be closely following the financial results of Paypal in its upcoming release. The company plans to announce its earnings on April 30, 2024. It is anticipated that the company will report an EPS of $1.18, marking a 0.85% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $7.5 billion, up 6.6% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $5.03 per share and a revenue of $31.94 billion, demonstrating changes of -1.37% and +7.28%, respectively, from the preceding year.

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Investors should also note any recent changes to analyst estimates for Paypal. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming 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, 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.86% increase. Paypal currently has a Zacks Rank of #4 (Sell).

In the context of valuation, Paypal is at present trading with a Forward P/E ratio of 12.85. This expresses a discount compared to the average Forward P/E of 28.46 of its industry.

It's also important to note that PYPL currently trades at a PEG ratio of 1.15. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Internet - Software industry stood at 1.87 at the close of the market yesterday.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 42, placing it within the top 17% of over 250 industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report

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