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Valued at a market cap of $83.6 billion, California-based PayPal Holdings, Inc. (PYPL) is a leading financial technology company facilitating digital payments for merchants and consumers worldwide. Its operations extend across numerous countries, making it a global player in the fintech industry. The fintech company is expected to announce its Q4 earnings before the market opens on Wednesday, Feb. 5.
Ahead of the event, analysts expect PayPal to report a profit of $1.11 per share, up marginally from $1.10 per share reported in the year-ago quarter. The company has surpassed Wall Street’s EPS estimates in each of the past four quarters. Its EPS of $1.20 for the last reported quarter exceeded the consensus estimates by 11.1%.
Further, analysts expect PayPal to report an EPS of $4.57 in fiscal 2024, up 20.9% from $3.78 in fiscal 2023.
Over the past 52 weeks, PYPL has surged 39.4%, outpacing the S&P 500 Index’s ($SPX) 22% gains, and the S&P 500 Financials Sector SPDR’s (XLF) 26.8% returns over the same time frame.
In 2024, PayPal saw its shares rise 39%, outpacing the S&P 500's ($SPX) 23.3% return. This marks a turnaround after years of underperformance, with PayPal's stock price hitting multi-year lows at the start of the year. The boost came from significant improvements in profit, driven by better transaction margins and controlled operating expenses.
PayPal has outperformed the broader market over the past year, fuelled by growing investor confidence. Optimism around the potential for lower interest rates to boost consumer spending appears to be driving the company's strong momentum.
Additionally, on Dec. 13, PYPL gained over 1% following an upgrade by Wolfe Research, which raised its rating from "Peer Perform" to "Outperform" and set a price target of $107.
The consensus opinion on PayPal stock is reasonably bullish, with an overall “Moderate Buy” rating. Out of the 41 analysts covering the stock, 17 recommend a “Strong Buy,” two advise a “Moderate Buy,” 21 suggest a “Hold” rating, and the remaining analyst gives a “Strong Sell.”
The average target price for PayPal is $93.23, indicating a potential upside of 11% from current price levels.
