Latest news with #AlexChriss'
Globe and Mail
30-04-2025
- Business
- Globe and Mail
Should You Buy PayPal Stock on the Dip in May 2025?
PayPal (PYPL) stock is in focus after announcing its first-quarter results that met or beat analyst estimates. The company also maintained its full-year guidance and pleased Wall Street with proof of improvement in its operations. Mizuho analyt Dan Dolev pointed to 'signs of strength' with PayPal increasing branded checkout volume and exceeding transaction margin expectations. This reinforces that that CEO Alex Chriss' revival plan is taking hold in stages. The larger fintech landscape has been mixed in the face of macroeconomic volatility and increased competition. However, PayPal's concentration on achieving profitable growth through its branded checkout business is beginning to reap tangible benefits. Some analysts believe that the worst may be over for the payment technology behemoth. About PayPal Stock San Jose, California-based PayPal (PYPL) is a global leader in payments and e-commerce transaction processing, operating popular platforms such as PayPal Checkout and Venmo. With a market cap of around $65 billion, PayPal is also a significant player in the financial technology industry despite current competitive challenges. PayPal stock has dropped about 5% in the last 12 months and is down nearly 25% in the year-to-date. However, signs of a recovery are starting to emerge. Shares are up nearly 4% over the past five sessions and are trading more than 15% above their 52-week low. The valuation is also attractive at the current levels. PayPal is trading at a forward price-earnings multiple of 13x and a price-sales multiple of 2x, both lower than its historical norms and those of peers in the fintech industry. An 11.6x price-to-cash flow ratio and return on equity of close to 24% reflect good underlying health and imply the stock may be undervalued compared with its profitability prospects. PayPal Tops Q1 EPS Estimate, Maintains 2025 Guidance PayPal posted Q1 2025 earnings of $1.33 per share, 15% higher than Wall Street's expectation of $1.16. Revenue was $7.8 billion, in line with expectations and higher by 1% compared to the same quarter of the previous year. It is worth mentioning that adjusted EPS increased 23% year-over-year, which is the fifth consecutive quarter of profitable growth since CEO Alex Chriss took over. For the rest of 2025, PayPal upheld its earlier business outlook, which analysts read as a vote of confidence in the face of a complex macroeconomic environment. Improvement in profitability, particularly in its branded checkout and unbranded payment solutions, remains a focus of management. Some of the key points during the quarter include 6% growth in branded checkout dollars (adjusted to remove leap-year impact), 20% growth in Venmo and more than 60% growth in debit card business. Transaction margin dollars, a measure of profitability, hit $3.7 billion and beat guidance, icnreasing faster than the growth in revenue and total payment volumes. What Analysts Expect from PayPal Stock Based on Barchart's Analyst Ratings snapshot, PayPal has a consensus 'Moderate Buy' recommendation. There are currently 44 analysts covering the stock, with 17 setting the stock to 'Strong Buy' and 22 to 'Hold.' The stock also has two 'Moderate Buy' ratings and three 'Strong Sell' ratings. This reflects the cautionary optimism surrounding the rebuilding of the company's momentum amid a competitive payments environment. PYPL has a mean target price of $82.84, representing 28% upside potential here.
Yahoo
04-02-2025
- Business
- Yahoo
PayPal Stock Crashes 10.6% Despite Blowout Earnings--What's Spooking Investors?
PayPal (NASDAQ:PYPL) just dropped a solid Q4 earnings beat, reporting adjusted EPS of $1.19 versus Wall Street's $1.12 estimate, and revenue of $8.37 billion, topping projections. The company also raised guidance, forecasting 2025 earnings between $4.95 and $5.10 per shareabove the $4.90 consensus. Venmo's total payment volume jumped 10% year-over-year, and branded checkout volume saw a 6% lift. To sweeten the deal, PayPal announced a massive $15 billion share buyback, planning to repurchase $6 billion worth of stock this year. Warning! GuruFocus has detected 5 Warning Sign with PYPL. But despite the strong numbers, investors weren't feeling it. Shares plunged 10.6% as of 12.17pm today , as analysts pointed to concerns over branded total payment volume growth missing targets. J.P. Morgan and Mizuho analysts suggested the sell-off was likely due to profit-taking after a 12% rally since last quarter's report. Others flagged ongoing questions about PayPal's checkout experience and whether it can fend off competition from Apple Pay and Shopify's Shop Pay. Transaction margin dollars climbed 7% to $14.7 billion in 2024, but the big question is whether CEO Alex Chriss' strategydoubling down on Venmo, Braintree, and merchant integrationscan keep that momentum rolling. Looking ahead, PayPal is banking on transaction margin dollar growth of 4%-5% in 2025 while pushing deeper into merchant partnerships and rolling out value-added services like Fastlane. Venmo's debit card and Pay With Venmo features are gaining traction, but PayPal still has to prove it can scale adoption fast enough. With fintech competition heating up, the company's ability to drive engagement and profitability in its core segments will determine whether this post-earnings dip is just a bump in the road or a red flag for what's ahead. This article first appeared on GuruFocus. Sign in to access your portfolio
