PayPal (NASDAQ:PYPL) Shares Down 9.2% - What's Next?

On Tuesday, PayPal Holdings, Inc. (NASDAQ:PYPL) saw a significant drop in its stock price, falling by 9.2% during mid-day trading. The stock reached a low of $80.20 before closing at $81.31. The trading volume was notable, with approximately 21,844,809 shares exchanged, which was a remarkable 148% increase compared to its average daily volume of 8,822,078 shares. Prior to this drop, the stock had closed at $89.51.

Wall Street Analysts Forecast Growth

Despite the recent downturn, several research firms have shared optimistic views on PayPal. For instance, Phillip Securities maintained an "accumulate" rating and raised its price target from $80.00 to $90.00 in a report dated November 1st. Similarly, Bank of America upgraded PayPal from a "neutral" to a "buy" rating, lifting their price target from $86.00 to $103.00 on December 9th. Canaccord Genuity increased their target price to $96.00 from $80.00, also giving the stock a "buy" rating. Additionally, Wells Fargo raised their price target from $75.00 to $80.00, while Goldman Sachs adjusted their target from $79.00 to $87.00, maintaining a "neutral" rating. Overall, analysts show confidence in PayPal, with the stock receiving fourteen hold ratings, twenty-one buy ratings, and one strong buy rating, leading to a consensus target price of $89.29 according to MarketBeat.

PayPal Trading Down 0.8%

As the market reacts, PayPal's stock currently shows a fifty-day simple moving average of $87.87 and a 200-day simple moving average of $79.39. Financially, the company's debt-to-equity ratio is 0.49, indicating a manageable level of debt. The quick and current ratios both stand at 1.25, suggesting healthy liquidity. PayPal holds a market capitalization of $78.77 billion and a P/E ratio of 18.75, alongside a price-to-earnings-growth ratio of 1.49, with a beta of 1.44, showcasing its volatility relative to the market.

In terms of earnings, PayPal's most recent results were released on February 4th, where the company reported earnings of $1.19 per share, surpassing expectations of $1.11 by $0.08. The company achieved a return on equity of 23.44% and a net margin of 14.08%. With a quarterly revenue of $8.37 billion, PayPal exceeded analyst expectations, which were set at $8.27 billion, marking a year-over-year revenue increase of 4.2%. Analysts predict an earnings per share (EPS) of 4.58 for the current fiscal year.

Institutional Inflows and Outflows

Institutional investor activity has been notable, with several firms adjusting their positions in PayPal. Vestmark Advisory Solutions grew its stake by 19.1%, now holding 6,916 shares valued at $590,000 after acquiring an additional 1,111 shares. Inceptionr LLC also bought a new position worth $1,179,000 during the fourth quarter. Townsend Asset Management lifted its stake by 7.6%, now owning 41,334 shares valued at $3,528,000 after adding 2,925 shares. Raymond James Financial acquired shares worth $135,537,000, further indicating strong institutional interest. Overall, institutional investors and hedge funds own 68.32% of PayPal's stock.

About PayPal

PayPal Holdings, Inc. operates a global technology platform for digital payments, connecting merchants and consumers worldwide. The platform facilitates transactions, allowing customers to send and receive payments online and in person, and offers various funding sources including bank accounts, PayPal accounts, Venmo, credit products, and even cryptocurrencies.

PayPal, Stocks, Earnings