PayPal’s Q3 Earnings Anticipated: A Look at Financial Trends and Stock Performance
PayPal Holdings, Inc. (PYPL), based in San Jose, California, is a prominent player in the financial technology sector, facilitating digital payments for merchants and consumers worldwide. With a market capitalization of $85.1 billion, the company is set to disclose its Q3 earnings before the market opens on Tuesday, October 29.
Strong Earnings Expected Around the Corner
Analysts predict PayPal will announce a profit of $1.08 per share, reflecting an increase of 11.3% compared to last year’s $0.97 per share. Notably, PayPal has consistently beaten Wall Street’s earnings expectations over the last four quarters. In its last reported quarter, adjusted EPS surged 43.4% year-over-year to $1.19, surpassing consensus estimates by 24%.
Growth Projections for Fiscal 2024 and Beyond
For fiscal 2024, analysts forecast PayPal’s adjusted EPS to reach $4.44, a 17.5% increase from $3.78 in fiscal 2023. Looking ahead to fiscal 2025, the adjusted EPS is anticipated to grow further, reaching $4.90, representing a 10.4% year-over-year growth.
Stock Performance Outpacing Market Indices
This year, PYPL stock has increased by 32.5%, significantly outperforming the S&P 500 Index’s (SPX) gain of 21.8% and the S&P 500 Financials Sector SPDR’s (XLF) 25.4% increase during the same period.
Positive Market Reaction Following Q2 Earnings
After reporting better-than-expected Q2 earnings on July 30, PayPal’s stock jumped 8.6%. The company experienced an 8.2% year-over-year increase in net revenues, totaling $7.9 billion, which exceeded analyst forecasts. This growth was partly due to a 10.7% rise in total payment volumes. Additionally, PayPal effectively managed costs, resulting in a 231 basis-points expansion in adjusted operating margins to 18.5% compared to the same period last year. This led to a remarkable 23.6% growth in adjusted operating profits, reaching $1.5 billion. Net income, too, experienced significant growth of 28% year-over-year, amounting to $1.2 billion.
The stock continues to perform well, hovering around its 52-week high of $82.48 reached in the last trading session.
Analyst Sentiment Indicates Cautious Optimism
The consensus rating on PYPL stock is moderately bullish, categorized as a “Moderate Buy.” Among the 42 analysts monitoring the stock, 15 suggest a “Strong Buy,” 2 favor a “Moderate Buy,” 24 recommend a “Hold,” and one advises a “Strong Sell.” Additionally, the average analyst price target stands at $81.79, suggesting slight upside potential from current levels.
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On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are provided solely for informational purposes. For more details, please refer to the Barchart Disclosure Policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
