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Is PayPal Stock Still a Buy After Missing Earnings?

Umito October 29, 2024

PayPal credits (PYPL) stock soared Tuesday after the payments giant reported mixed results for its third quarter and raised its profit forecast for the full year.

During the quarter ended September 30PayPal’s net revenue rose 5.8% year over year to $7.8 billion, driven in part by a 5.7% rise in payment transactions to $6.6 billion. At the same time, its earnings per share (EPS) rose 22.5% year-over-year to $1.20.

“PayPal delivered strong financial and operational results during a very productive third quarter,” CEO Alex Chriss said in a statement. “We are making strong progress in our transformation as we bring new innovations to market, forge significant partnerships with leading business players, and drive awareness and engagement through new marketing campaigns. »

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The company’s financial and financial results were mixed compared to analysts’ expectations. Wall Street expected revenue of $7.9 billion and earnings of $1.07 per share, according to Yahoo Finance.

PayPal’s total payments volume increased 9% year-over-year to $422.6 billion in the quarter, driven by a 0.9% increase in active accounts to 432 million and an increase in transactions of payment per active account by 8.5% to 61.4.

For the fourth quarter, PayPal said it expects low single-digit revenue growth and a profit decline in the low-to-mid range. And for the full year, it now expects profit growth in the range of 15%, up from its previous forecast of low-to-medium growth.

“We are raising our non-GAAP guidance for the full year and are pleased with the strength we are seeing across the business,” Chriss said. “We have built a strong foundation over the past year that will serve us well in the years to come.”

Is PayPal stock a buy, sell or hold?

Heading into Tuesday’s session, PayPal was up 36% for the year to date, easily outpacing the S&P 500’s 23.5% total return (price change plus dividends). And most people on Wall Street think that financial stocks has more space to run.

According to S&P Global Market IntelligenceThe average analyst target price for PYPL stock is $85.58, which represents an implied upside of about 10% from current levels. Additionally, the consensus recommendation is Buy.

But not everyone agrees large cap stocks. Financial services firm Morgan Stanley has an Equal Weight rating (equivalent to a Hold) on PYPL with a price target of $71.

“PayPal’s huge online acceptance and low industry attrition can support growth in line with overall e-commerce,” the Morgan Stanley analyst wrote. James Robinette in a note dated October 24. “Improvements in operational efficiency as well as ongoing share repurchases can also support EPS growth in the lower teens.

However, Faucette expresses concerns about PayPal’s strategic direction, citing slow progress in improving branded payment, doubts about Venmo’s monetization potential among Gen Z and Y shoppers, as well as Uncertainty about the company’s investment priorities and its ability to execute key strategies.

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Is PayPal Stock Still a Buy After Missing Earnings?

Umito

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Is PayPal Stock Still a Buy After Missing Earnings?

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