PayPal (NASDAQ:PYPL) Trading Down 1.8% – Here’s What Happened

Shares of PayPal Holdings, Inc. (NASDAQ:PYPL) dropped 1.8% on Friday . The stock traded as low as $45.33 and last traded at $45.37. Approximately 13,378,912 shares changed hands during mid-day trading, a decline of 36% from the average daily volume of 20,989,688 shares. The stock had previously closed at $46.22.

Key PayPal News

Here are the key news stories impacting PayPal this week:

• Negative Sentiment: Macquarie downgraded PayPal to Neutral from Outperform and cut its price target to $50, saying the company’s Q2 outlook looks soft and its cost-saving plan is heavily back-end loaded. Macquarie Downgrades PayPal as Cost-Saving Plan Looks Too Back-End Loaded
• Negative Sentiment: The U.K. Financial Conduct Authority launched a competition probe into PayPal’s digital wallet funding and usage practices, adding regulatory uncertainty in an important international market. FCA Probe Tests PayPal’s UK Wallet Economics And Growth Narrative
• Negative Sentiment: Bank of America also lowered its price target on PayPal to $53 from $55 while keeping a neutral stance, reinforcing the view that upside may be limited near term. BofA Securities Adjusts PayPal Price Target
• Neutral Sentiment: Needham reiterated a Hold rating, while other recent analyst notes were mixed, suggesting Wall Street is divided on PayPal’s next move. PayPal’s (PYPL) “Hold” Rating Reiterated at Needham & Company LLC
• Neutral Sentiment: PayPal’s recent earnings beat showed solid quarterly results, but investors appear focused more on the company’s slower growth narrative and reset expectations than on the beat itself.

Wall Street Analyst Weigh In

Several analysts recently commented on the company. Canaccord Genuity Group reiterated a “hold” rating and issued a $42.00 target price (down from $100.00) on shares of PayPal in a report on Wednesday, February 4th. Zacks Research upgraded shares of PayPal from a “strong sell” rating to a “hold” rating in a report on Friday, April 17th. Cantor Fitzgerald boosted their price target on shares of PayPal from $42.00 to $54.00 and gave the stock a “neutral” rating in a research report on Tuesday. Susquehanna reduced their price objective on shares of PayPal from $90.00 to $63.00 and set a “positive” rating on the stock in a research note on Wednesday, February 4th. Finally, Weiss Ratings reiterated a “hold (c)” rating on shares of PayPal in a research report on Thursday, January 22nd. Eight research analysts have rated the stock with a Buy rating, thirty-two have issued a Hold rating and five have assigned a Sell rating to the company. According to data from MarketBeat.com, the stock presently has an average rating of “Hold” and an average target price of $56.42.

PayPal Stock Down 1.8%

The firm has a market cap of $40.02 billion, a price-to-earnings ratio of 8.51, a PEG ratio of 1.33 and a beta of 1.39. The firm has a 50 day moving average of $46.75 and a 200 day moving average of $53.99. The company has a quick ratio of 1.29, a current ratio of 1.26 and a debt-to-equity ratio of 0.47.

PayPal (NASDAQ:PYPL) last posted its quarterly earnings results on Tuesday, May 5th. The credit services provider reported $1.34 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.27 by $0.07. The firm had revenue of $8.35 billion for the quarter, compared to analysts’ expectations of $8.05 billion. PayPal had a return on equity of 25.02% and a net margin of 15.00%.The company’s revenue for the quarter was up 7.2% compared to the same quarter last year. During the same period in the prior year, the business earned $1.33 EPS. As a group, sell-side analysts predict that PayPal Holdings, Inc. will post 5.32 earnings per share for the current year.

PayPal Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, June 25th. Investors of record on Thursday, June 4th will be paid a dividend of $0.14 per share. The ex-dividend date of this dividend is Thursday, June 4th. This represents a $0.56 annualized dividend and a yield of 1.2%. PayPal’s dividend payout ratio is currently 10.51%.

Insider Activity at PayPal

In other PayPal news, insider Suzan Kereere sold 13,515 shares of the firm’s stock in a transaction that occurred on Tuesday, March 3rd. The stock was sold at an average price of $46.02, for a total value of $621,960.30. Following the completion of the sale, the insider owned 30,983 shares of the company’s stock, valued at approximately $1,425,837.66. This trade represents a 30.37% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Also, insider Frank Keller sold 10,732 shares of the business’s stock in a transaction that occurred on Wednesday, April 29th. The shares were sold at an average price of $49.96, for a total value of $536,170.72. Following the sale, the insider owned 41,567 shares of the company’s stock, valued at approximately $2,076,687.32. This represents a 20.52% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 96,199 shares of company stock valued at $4,294,018 in the last three months. Corporate insiders own 0.63% of the company’s stock.

Institutional Trading of PayPal

Several hedge funds have recently bought and sold shares of the business. Vanguard Group Inc. raised its holdings in PayPal by 6.5% during the fourth quarter. Vanguard Group Inc. now owns 90,376,927 shares of the credit services provider’s stock worth $5,276,205,000 after buying an additional 5,534,462 shares during the last quarter. Capital Research Global Investors lifted its stake in shares of PayPal by 2.3% in the third quarter. Capital Research Global Investors now owns 27,953,803 shares of the credit services provider’s stock valued at $1,874,637,000 after buying an additional 636,441 shares in the last quarter. Norges Bank acquired a new position in shares of PayPal during the fourth quarter valued at about $949,758,000. Invesco Ltd. increased its position in shares of PayPal by 9.7% during the fourth quarter. Invesco Ltd. now owns 12,215,792 shares of the credit services provider’s stock worth $713,158,000 after acquiring an additional 1,083,843 shares in the last quarter. Finally, Dimensional Fund Advisors LP increased its position in shares of PayPal by 4.3% during the first quarter. Dimensional Fund Advisors LP now owns 9,179,771 shares of the credit services provider’s stock worth $415,192,000 after acquiring an additional 376,530 shares in the last quarter. Institutional investors and hedge funds own 68.32% of the company’s stock.

PayPal Company Profile

PayPal Holdings, Inc operates a global digital payments platform that enables consumers and merchants to send and receive payments online, on mobile devices and at the point of sale. The company provides a broad set of payment solutions, including a digital wallet, merchant payment processing, checkout services, invoicing and fraud-management tools. PayPal’s platform is designed to support e-commerce, in-person retail and person-to-person transfers, targeting both individual consumers and businesses of varying sizes.

Key products and services in PayPal’s portfolio include the PayPal wallet and checkout ecosystem, the Venmo peer-to-peer mobile app, Braintree’s developer-focused payment gateway, Xoom for international money transfers, and PayPal Credit and buy-now-pay-later options.