PayPal Holdings, Inc. (NASDAQ: PYPL) experienced a decline of 1.2% in its stock price during trading on Wednesday, falling to $58.38 from a previous close of $59.10. The shares reached a low of $58.34, with approximately 12.7 million shares traded, which is a slight increase of 1% compared to the average daily volume of 12.65 million shares.
Analysts’ Ratings Impact Future Outlook
Market sentiment appears to be shifting regarding PayPal as several research firms have recently revised their ratings. Notably, Wall Street Zen downgraded the stock from a “buy” to a “hold” on December 6, 2023. Morgan Stanley reaffirmed a “negative” rating on October 29, 2023, while UBS Group lowered its price target from $80.00 to $65.00 in its report on December 24, 2023. Furthermore, Cowen maintained a “mixed” rating, and JPMorgan Chase & Co. issued a “neutral” rating with a revised target of $70.00, down from $85.00.
Currently, a consensus rating of “Hold” has emerged from 14 analysts who rate the stock as a buy, 22 as a hold, and 4 as a sell. According to MarketBeat, the average target price stands at $78.29.
Investors are keenly awaiting PayPal’s upcoming earnings announcement, expected on October 28, 2023.
Financial Performance and Future Guidance
PayPal’s financial metrics indicate a market capitalization of $54.62 billion, with a price-to-earnings (P/E) ratio of 11.70 and a price-to-earnings growth (PEG) ratio of 0.79. The stock’s 50-day simple moving average is $62.93, while the 200-day average sits at $67.94. The company reported a debt-to-equity ratio of 0.56 and a current ratio of 1.34.
In its most recent quarterly earnings report, PayPal announced earnings per share (EPS) of $1.34, surpassing the consensus estimate of $1.20 by $0.14. The company’s revenue for the quarter reached $8.42 billion, exceeding analysts’ expectations of $8.21 billion, marking a year-on-year revenue increase of 7.3%. Looking ahead, PayPal has set its Q4 2025 guidance at EPS between 1.270 and 1.310, and its full-year guidance at 5.350 to 5.390 EPS. Analysts predict an EPS of 5.03 for the current fiscal year.
On December 10, 2023, PayPal also declared a quarterly dividend of $0.14, paid to shareholders of record as of November 19, 2023. This translates to an annualized dividend of $0.56, yielding approximately 1.0%. The dividend payout ratio currently stands at 11.22%.
Insider Trading and Institutional Holdings
In related news, insider Suzan Kereere sold 12,500 shares on November 3, 2023, at an average price of $68.87, amounting to a total transaction value of $860,875. Following this transaction, Kereere’s holdings decreased by 28.75%. Another executive, Diego Scotti, sold 3,838 shares on October 30, 2023, for a total of $264,706.86, resulting in an 18.43% reduction in his ownership.
Over the past ninety days, insiders have sold a total of 36,156 shares, valued at $2.43 million, with institutional investors owning approximately 68.32% of PayPal’s stock. Capital Research Global Investors increased its holdings by 2.3% during the third quarter, acquiring an additional 636,441 shares and bringing their total to 27,953,803 shares, valued at $1.87 billion.
As PayPal continues to navigate market challenges and adjust to analyst feedback, stakeholders will be closely monitoring the company’s performance in the upcoming earnings report and the broader implications for its strategic direction in the digital payments landscape.
