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San Jose, California-based PayPal Holdings, Inc. (PYPL) is a financial technology company that enables digital payments on behalf of merchants and consumers. With a market cap of $60.7 billion, PayPal’s operations span various countries around the globe. The fintech company is expected to announce its Q2 earnings before the market opens on Tuesday, July 30.
Ahead of the event, analysts expect PayPal to report a profit of $0.96 per share, up 15.7% from $0.83 per share reported in the year-ago quarter. The company has surpassed Wall Street’s EPS estimates in three of the past four quarters while missing on one other occasion. Its EPS for the last reported quarter grew 26.7% year over year to $1.09 and exceeded the consensus estimates by 18.5%.
Over the longer term, analysts expect PayPal to report an EPS of $4.15 in fiscal 2024, up 9.8% from $3.78 in fiscal 2023. In fiscal 2025, its EPS is expected to grow 9.9% year over year to $4.56.
PYPL stock is down 5% on a YTD basis, substantially underperforming the S&P 500 Index’s ($SPX) 13.8% gains and the S&P 500 Financials Sector SPDR’s (XLF) 13.2% returns over the same time frame.
PayPal has been navigating rough waters, battling fierce competition in digital payments and grappling with how to monetize Venmo effectively. The company's struggle to adapt its business model amid market shifts has been evident.
Yet, on April 30, PayPal's stock saw a modest rise. Its Q1 earnings revealed strong consumer spending, improved profit margins from strategic cost-cutting, and an upbeat forecast for fiscal 2024 earnings, showcasing resilience in a tough market.
The consensus opinion on PayPal stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 40 analysts covering the stock, 14 recommend a “Strong Buy,” three advise a “Moderate Buy,” and 23 suggest a “Hold” rating. Over the past three months, a new “Strong Buy” recommendation has been added to the consensus rating.
The average target price for PayPal is $74.13, indicating a potential upside of 27.7% from current price levels.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
