PayPal Stock Price Loses 15% Since Earnings; But What Went Wrong?
The American financial technology company involved in the payment settlements, PayPal Holdings Inc. $PayPal(PYPL)$ remains part of mainstream conversations, though this time it saw two major events. Surprisingly, despite these events, PayPal’s stock price resists showing any optimism and continues to drop further.
PayPal released the quarterly earnings report on August 2. The instance was expected to push the stock price upwards. But surprisingly, PayPal stock price fell dramatically and is currently 15% down since then.
The company posted $7.29 Billion in revenue, an increase of 7% from the previous year’s revenue. The earnings per share (EPS) for the quarter remained $1.16 beating the analyst estimates.
In the payment volumes front, PayPal saw $376.5 Billion marking an increase of 11% yearly for the quarter ended in June 2023. While the operating and free cash flow were negative $200 Million and $400 Million respectively.
The payment giant bought back 22 Million PayPal shares during the quarter and it held cash, cash equivalents, and investments worth $14.4 Billion.
Despite the positive growth in some of the crucial metrics, the lag in other factors could be behind PayPal stock price fall. The company posted an adjusted non-GAAP operating margin of 21.4% which missed the company estimate. Also, the company lost up to 2 million users as the number of active accounts fell from 433 Million to 431 Million users during the quarter.
The stock price witnessed a significant dip following the earnings taking a steep fall of 15%. PYPL stock price traded at $63.19 after losing over 1% in the last intraday session on Tuesday. Currently, it is trading at $62.71 continuing the declining streak.
Given the current PayPal stock price, it is up by 6% from the multi-year low at $60. If the fall continues and stock price tumbles ahead, it could see the retest of the immediate support it attained in May this year.
PayPal Stock Price Loses 15% Since Earnings; But What Went Wrong?
Prior to the earnings release, PYPL stock was in an uptrend and in order to attain the 200-day moving average at $77, it even tested immediate resistance at $76. However, the uprise could not sustain the momentum and fell to 18% within the last two weeks.
PayPal stock price is trading below both 50-day and 200-day exponential moving averages (EMA) signifying the bearish trend. Other crucial indicators also indicate similar sentiments for the stock price.
MACD is nearing the zero line with the downside curve showing the possibility of stock price continuing the negative growth. While RSI maintains above 54 suggests the fall in price to halt and consolidate.
Comments
PayPal is falling because of the uncertainty surrounding the Federal government’s involvement in analyzing every PayPal transaction at and over $600.
Anyone else super bullish if they do some stock buy backs at these levels? They have so much in FCF, it would only make sense. PE ratio would sky rocket, which would increase the share price. Thoughts?
Look at the positive cash flow of PYPL then look at SQ and A firm and I think you will see the real Gem is PYPL and the others are on life support and only one bad move and they are out of business
if the price is tanking, but blackrocks ownership is skyrocketing then your decision should be obvious.
Oversold definitely now. 57.29 is the 5 year all time low.