Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Paypal (PYPL), which currently has a Momentum Style Score of A. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.

It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Paypal currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?

In order to see if PYPL is a promising momentum pick, let's examine some Momentum Style elements to see if this technology platform and digital payments company holds up.

A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.

For PYPL, shares are up 1.45% over the past week while the Zacks Internet - Software industry is up 0.23% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 10.84% compares favorably with the industry's 2.18% performance as well.

While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Shares of Paypal have increased 33.23% over the past quarter, and have gained 39.17% in the last year. On the other hand, the S&P 500 has only moved 3.56% and 36.11%, respectively.