Investors with an interest in Internet - Software stocks have likely encountered both Paypal (PYPL) and Adyen N.V. Unsponsored ADR (ADYEY).
Zacks.com users have recently been watching Paypal (PYPL) quite a bit. Thus, it is worth knowing the facts that could determine the stock's prospects.
Despite PayPal's Q4 2024 earnings beating expectations, the stock dropped by 13% due to a slowdown in unbranded checkout growth and a decline in the number of transactions. Despite the market overreaction, PYPL's underlying fundamentals remain intact. PayPal is still a competitively strong and profitable business with a strong balance sheet. The Company's focus on small and medium-sized businesses promises higher margins, which could offset the slowdown in its TPV with a higher transaction margin.
PayPal Holdings' stock dropped 13% despite beating earnings and sales estimates, due to a minor miss in payment volume expectations. Active accounts grew by 2.6 million QoQ, showing a resurgence in growth and removing a major obstacle for the company. Transaction margins improved to 47%, indicating better profitability, and the profit forecast for 2025 remains robust.
Shares of leading digital payment platform PayPal (PYPL -1.00%) sank 13% this week as of 1:30 p.m. ET Friday, according to data provided by S&P Global Market Intelligence.
SoFi Technologies (SOFI -4.45%) and PayPal (PYPL -0.80%) are leading players in the financial technology space, each providing a unique take on this expanding market. Sofi offers customers everything from student loan refinancing to savings accounts, while PayPal continues to play a leading role in online and mobile-based payments.
PayPal (PYPL -0.80%) recently reported its fourth-quarter earnings, and for the most part, the numbers look excellent. However, there were a couple of trouble spots that sent the stock plunging.
PayPal (PYPL -0.80%) shares dropped as much as 13% after the fintech reported solid fourth-quarter results and issued an upbeat outlook on Feb. 4. But the stock is still up almost 30% during the past year as of this writing.
PayPal investors were likely surprised with the post-earnings selloff, but I had already cautioned about not taking the optimism too far. PayPal's shift toward profitable growth shouldn't be mistaken for weakness, although questions about what's next are justified. Management's decision to hold an investor day later this month is timely, which should help to allay investor fears about its growth plans.
PayPal Holdings, Inc. shares dropped 13% despite beating Q4 estimates and announcing a $15 billion buyback plan, due to concerns over unbranded volume growth and branded checkout lagging. Q4 results showed 4% YoY revenue growth and 2% YoY non-GAAP operating income growth, with positive account metrics indicating progress on user engagement. Management's FY 2025 guidance fell short of market expectations, projecting modest growth and $6 billion in share repurchases, highlighting strong cash generation.
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PayPal's recent sell-off is unwarranted; the company continues to deliver strong operational performance, growing top-line revenue, EPS, and FCF while planning significant share repurchases. Despite competitive risks and market overreactions, PayPal remains a profitable business with strong margins, projected to repurchase $6 billion in shares in 2025. PayPal's valuation is attractive compared to peers like Visa and Mastercard, trading at lower multiples despite continued growth in revenue and profitability.