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Key Stats for PayPal Stock
- Price Change for PayPal stock: -8.7%
- Current Share Price: $71
- 52-Week High: $94
- PYPL Stock Price Target: $82
What Happened?
PayPal (PYPL) stock fell over 8% yesterday despite reporting second-quarter results that beat Wall Street expectations on both earnings and revenue.
The digital payments giant posted adjusted earnings per share of $1.40 versus the $1.30 consensus estimate, while revenue of $8.29 billion exceeded expectations of $8.08 billion.
However, investors focused on concerning trends beneath the headline beats. Transaction margin dollars, a key profitability metric, grew 7%, marking the sixth consecutive quarter of growth but representing a deceleration from the 8% growth achieved in the first quarter.
More troubling, branded checkout volumes slowed to 5% growth from 6% in Q1, signaling potential weakness in PayPal’s core business.
The quarter also revealed operational challenges for PYPL stock, with total operating expenses rising to $6.78 billion from $6.26 billion in Q1.
Most concerning to investors was the dramatic drop in adjusted free cash flow to $656 million, roughly one-third of Street expectations and down from $1.4 billion in the previous quarter.
See analysts’ growth forecasts and price targets for PayPal (It’s free!) >>>
What the Market Is Telling Us About PYPL Stock
Despite PayPal’s transformation efforts under CEO Alex Chriss showing some positive signs, including strong 20% Venmo revenue growth and progress in Braintree volumes, investors appear concerned about the pace of improvement relative to expectations.
PayPal’s guidance also reflects this caution, with third-quarter transaction margin dollar growth expected to slow further to 4% at the midpoint.
While PayPal raised its full-year EPS guidance and projects $6-7 billion in free cash flow, the sequential deceleration in key growth metrics suggests the turnaround story may take longer to play out than hoped.
The stock’s 8.4% year-to-date decline versus the Nasdaq’s 10% gain reflects ongoing investor skepticism about PayPal’s ability to reignite growth in an increasingly competitive digital payments landscape.
The ongoing sell-off in PYPL stock indicates that even solid execution may not be enough if the underlying business momentum continues to face headwinds.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
