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Most Trending
-14.22%
+7.46%
-17.70%
+13.84%
-0.95%
Most Trending
-14.22%
+7.46%
-17.70%
+13.84%
-0.95%
TrendspotteamFinding new investment opportunities based on Market Sentiment and Indicators. Manage portfolio risk with leading indicator of volatility See what influential analysts and investors are saying about stocks in your watchlist
PayPal dives after reports that were supposedly better than analysts' expectations. The company's forecast for the next quarter is also above expectations. PayPal did do well on the top and bottom lines, but when analysts dug into the reports, they saw warning signs. PayPal's operating margin fell to 21.4% compared to more than 22.7% in the previous quarter and below the company's own forecast.
The reason is due to more provisions for credit losses or to cover loans given to the public. PayPal fears that fewer loans will return than it previously thought, this is also due to the increase in interest rates in the economy.
"In the third quarter, we will still see pressure on the transaction margin performance. In the fourth quarter, we expect to see an improvement", Gabriel Rabinovitch, CFO
Speaking to analysts last quarter, PayPal's transaction margin - a measure of the profitability of the company's core transaction processing business - shrank to 45.9%, a decline for the third quarter in a row. "We understand that in the medium-long term we need to deliver dollar growth of our transaction margins to ensure that we grow our profit sustainably." CEO Shulman.
In the reports, PayPal reported a profit of $1.16 per share on revenues of $7.3 billion, above analysts' expectations of $1.15 per share on revenues of $7.27 billion. In the third quarter of this year, PayPal expects to post a profit of $1.23 per share in the coming quarter, above analysts' expectations of $1.21 per share. On the top line, the company expects revenues of $7.4 billion, above the analyst consensus of $7.32 billion.
The total volume of payments at PayPal increased by 11% in the second quarter to $376.5 billion, above the analyst consensus of $372 billion and faster than the 10% that the company achieved in the previous three quarters. PayPal benefited from the increased use of the public, travel and willingness to spend more money after the Corona. Consumer confidence is at a two-year high, aided by the strong labor market and low unemployment.
Out of 44 analysts who reviewed the stock, 32 give it a buy recommendation, 14 a strong buy and another 18 a buy. 12 recommend the hold. No one recommends selling - but that obviously didn't help investors when the stock is plunging today. The analysts' average target price is $81.6 per share, an upside of 25% compared to the current price.
Please note that the article should not be considered as investment advice or marketing, and it does not take into account the personal data and requirements of any individual. It is not a substitute for the reader's own judgment, and it should not be considered as advice or recommendation for buying or selling any securities or financial products.
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The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
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Disclaimer:
The Score performance whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained.
The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. The Readiness Indicators, Sentiment Indicators and total score are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Active trading is generally not appropriate for someone of limited resources, limited invesment or trading experience, or low-risk tolerance. Your capital may be at risk.
Please note that no offer or solicitation to buy or sell securities, securities derivatives of future products of any kind, or any type of trading or invesment advise, recommendation or strategy, is made, given or endorsed by StocksRunner including any of their affiliates ("TS").
This information is provided for illustrative purposes only. You should not rely on any advice and/or information contained in this website and before making any investment decision. we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
