Shares of PayPal slumped Tuesday as the payment platform's adjusted earnings missed estimates for the final quarter of 2024.
PayPal Holdings, Inc. (NASDAQ:PYPL ) Q4 2024 Earnings Conference Call February 4, 2025 8:00 AM ET Company Participants Steve Winoker - Chief Investor Relations Officer Alex Chriss - President & CEO Jamie Miller - EVP & CFO Conference Call Participants Andrew Schmidt - Citi Ramsey El-Assal - Barclays Jason Kupferberg - Bank of America Tien-Tsin Huang - JP Morgan Darrin Peller - Wolfe Research Timothy Chiodo - UBS Sanjay Sakhrani - KBW Colin Sebastian - Baird Harshita Rawat - Bernstein Trevor Williams - Jefferies Operator Good morning and welcome to PayPal's Fourth Quarter and Full Year 2024 Earnings Conference Call. My name is Sarah and I will be your conference operator today.
PayPal Holdings, Inc.'s growth prospects are lackluster, and I can't justify paying 12x forward free cash flow for the stock. Despite a strong balance sheet and $7 billion in projected 2025 free cash flow, the crowded fintech space limits PayPal's appeal. The fintech market is highly competitive, making it hard for PayPal to regain market share and stand out.
The headline numbers for Paypal (PYPL) give insight into how the company performed in the quarter ended December 2024, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.
Paypal (PYPL) came out with quarterly earnings of $1.19 per share, beating the Zacks Consensus Estimate of $1.13 per share. This compares to earnings of $1.48 per share a year ago.
U.S. stock futures were mostly lower this morning, with the Dow futures falling around 100 points on Tuesday.
PayPal's stock is down 6%, with an analyst noting that growth in branded-checkout volume seems to have trailed buy-side expectations.
PayPal forecast full-year profit above estimates on Tuesday, fueled by a push to revive growth in branded products, improve pricing and sharpen cost-cutting efforts, sending shares of the digital payments giant up 5% in premarket trading.
PayPal reported better-than-expected fourth-quarter earnings and revenue in its quarterly report on Tuesday. The company also issued guidance that topped estimates.
The fintech easily beats quarterly estimates for earnings and sales.
PayPal's stock has outperformed the market, driven by its strong market position and resilience against competitors like Apple's Afterpay and X's social payment initiatives. The partnership between X and Visa enhances social payments, benefiting PayPal, which already leads in this space with Venmo and Meta collaborations. Despite mixed EPS and revenue estimates for Q4, PayPal's long-term EPS growth and strategic partnerships justify a premium valuation and a strong buy recommendation.
PYPL stock is benefiting from a strong portfolio, rich partner base and expanding features amid a challenging macroeconomic environment.