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Paypal (PYPL) Gains As Market Dips: What You Should Know

Paypal (PYPL) closed at $271.09 in the latest trading session, marking a +0.84% move from the prior day. This change outpaced the S&P 500's 0.09% loss on the day.

Prior to today's trading, shares of the technology platform and digital payments company had gained 13.65% over the past month. This has outpaced the Computer and Technology sector's gain of 10.43% and the S&P 500's gain of 5.45% in that time.

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. The company is expected to report EPS of $1.01, up 53.03% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.9 billion, up 27.72% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.58 per share and revenue of $25.65 billion, which would represent changes of +18.04% and +19.58%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for PYPL. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.13% higher within the past month. PYPL currently has a Zacks Rank of #3 (Hold).

Digging into valuation, PYPL currently has a Forward P/E ratio of 58.74. For comparison, its industry has an average Forward P/E of 79.44, which means PYPL is trading at a discount to the group.

It is also worth noting that PYPL currently has a PEG ratio of 2.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry currently had an average PEG ratio of 4.51 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 187, which puts it in the bottom 27% of all 250+ industries.

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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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