PayPal Holdings, Inc. (NASDAQ:PYPL) experienced a significant decline in its stock price, dropping by 1.2% during trading on Wednesday, October 28, 2023. The stock reached a low of $58.34 before closing at $58.38. Approximately 12,741,401 shares changed hands, reflecting a slight increase of 1% from the average daily volume of 12,651,667 shares.
Analyst Ratings Reflect Cautious Outlook
Several research firms have recently revised their ratings on PayPal’s stock, contributing to the downward trend. On December 6, Wall Street Zen downgraded PayPal from a “buy” rating to a “hold” rating. Similarly, JPMorgan Chase & Co. reissued a “neutral” rating, adjusting its price target from $85.00 to $70.00. In reports released on October 29, Morgan Stanley maintained a “negative” rating, while UBS Group lowered its price objective from $80.00 to $65.00. Currently, 14 analysts have rated PayPal with a “buy,” 22 have assigned a “hold,” and four have issued a “sell” rating. The consensus rating stands at “hold” with an average target price of $78.29, according to data from MarketBeat.
Financial Performance and Future Projections
PayPal’s market capitalization is currently $54.62 billion, with a price-to-earnings (P/E) ratio of 11.70. The company reported $8.42 billion in revenue for the last quarter, exceeding analysts’ expectations of $8.21 billion. Earnings per share (EPS) were reported at $1.34, surpassing the consensus estimate of $1.20 by $0.14. The firm noted a net margin of 14.96% and a return on equity of 25.64%. Looking ahead, PayPal has set its Q4 2025 guidance for EPS between $1.270 and $1.310, and its full fiscal year guidance at $5.350 to $5.390.
On December 10, PayPal announced a quarterly dividend of $0.14 per share, paid to stockholders of record as of November 19. This equates to an annualized dividend of $0.56 and represents a 1.0% yield, with a payout ratio of 11.22%.
Insider trading activity has also garnered attention, with Suzan Kereere, an insider, selling 12,500 shares at an average price of $68.87 on November 3, amounting to a total transaction of $860,875. Following this sale, Kereere’s holdings decreased by 28.75%. Additionally, EVP Diego Scotti sold 3,838 shares on October 30, reducing his position by 18.43%.
Institutional investors have been adjusting their stakes in PayPal as well. Notably, Capital Research Global Investors increased its holdings by 2.3% during the third quarter, bringing its total to 27,953,803 shares valued at approximately $1.87 billion. Norges Bank also acquired a new position valued at $921.57 million, while Artisan Partners Limited Partnership added 184,014 shares. Overall, institutional investors currently control 68.32% of PayPal’s stock.
PayPal operates a global digital payments platform, facilitating transactions for consumers and merchants online, on mobile devices, and at points of sale. The company provides a diverse range of payment solutions, including a digital wallet, merchant payment processing, and fraud-management tools. Its key offerings encompass the PayPal wallet, the Venmo app, Braintree’s payment gateway, and various credit options.
As analysts and investors continue to assess PayPal’s performance, the stock’s recent fluctuations highlight the ongoing challenges and opportunities facing the digital payments giant.
