In the latest close session, Paypal (PYPL) was down 1.82% at $40.71. This change lagged the S&P 500's 1.62% loss on the day. On the other hand, the Dow registered a loss of 1.87%, and the technology-centric Nasdaq decreased by 1.98%.
Shares of the technology platform and digital payments company have depreciated by 8.76% over the course of the past month, underperforming the Business Services sector's gain of 0.29%, and the S&P 500's loss of 0.03%.
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 $1.28, showcasing a 8.57% downward movement from the corresponding quarter of the prior year. Meanwhile, our latest consensus estimate is calling for revenue of $8.5 billion, up 2.58% from the prior-year quarter.
PYPL's full-year Zacks Consensus Estimates are calling for earnings of $5.3 per share and revenue of $34.26 billion. These results would represent year-over-year changes of -0.19% and +3.29%, respectively.
It is also important to note the recent changes to analyst estimates for Paypal. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 0.44% lower. Paypal presently features a Zacks Rank of #3 (Hold).
Looking at its valuation, Paypal is holding a Forward P/E ratio of 7.82. This denotes a discount relative to the industry average Forward P/E of 9.25.
Investors should also note that PYPL has a PEG ratio of 1.04 right now. 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 Financial Transaction Services industry was having an average PEG ratio of 0.8.
The Financial Transaction Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 71, this industry ranks in the top 30% of all industries, numbering over 250.
The Zacks Industry Rank gauges the strength of our individual 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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PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).