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Right on the money – PayPal meets expectations as stock pops 5%

Dino
Kurbegovic
2 months ago
2 mins read

PayPal Holdings (NASDAQ: PYPL) on Wednesday, April 27, after-hours trading rose at one point by 5.7% as they met earnings expectations and beat revenue. It was not all positive though as the company adjusted down its expectations for new accounts for 2022. 

First quarter revenue of $6.48 billion was better than the anticipated $6.41 billion with 2.4 million net new accounts added. Transactional revenue was up 13% year-on-year or $323 billion this quarter versus $339.5 billion in the year-ago quarter. The company also mentioned that due to the suspension of transactional services in Russia a negative impact of $0.03 was subtracted from earnings per share (EPS). 

Expectations for this year’s range in EPS lie between $3.81 to $3.93 which is down from the previously announced range of $4.60 to $4.75.   

Chart and analysts’ predictions 

Shares performance is not something to write home about, in the second half of August 2021, the stock started a downwards momentum and created a long descending channel. Currently, despite the after-hours pop PYPL is trading below daily Simple Moving Averages

With inflationary worries, Federal Reserve (Fed) tightening money markets, tech stocks simply can not catch a break. It seems that even positive news evaporates quickly and shares continue trending downward. 

 PYPL 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

Analysts however are still quite bullish on the stock giving it a moderate buy rating. For the next 12 months, the analysts see the average stock price to be at $163.92 which is almost double the current trading price of $82.61, a whopping possible 98.43% increase

Source: TipRanks

PayPal continues to generate significant cash flow as can be inferred from the earnings report, and with analysts’ predictions, the shares seem to have a fair price. However, given the current investing environment coupled with war in Ukraine, inflationary pressures, new Covid lockdowns in China, and an aggressive Fed simply don’t allow stocks to catch a break. 

Therefore, investors should take into consideration the sentiment before deciding to take a plunge. Companies with strong earnings and solid business fundamentals should do well in the long run, as folk wisdom on Wall Street claims.  

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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Dino Kurbegovic
Author

Dino is an investor and technology enthusiast with years of experience in managing complex projects. At Finbold he covers stories on stocks, investing, micro and macroeconomic trends. Also, he’s also building a micro solar power plants in his hometown.

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