PayPal (NASDAQ:PYPL) Trading Down 1.2% – Here’s Why

PayPal Holdings, Inc. (NASDAQ:PYPL) traded down 1.2% during mid-day trading on Friday . The company traded as low as $58.81 and last traded at $59.07. Approximately 8,285,867 shares changed hands during mid-day trading, a decline of 57% from the average daily volume of 19,205,408 shares. The stock had previously closed at $59.78.

Key Stories Impacting PayPal

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: PayPal continues to screen as a value opportunity after its substantial multiyear decline. Analysts point to relatively attractive valuation metrics, earnings performance above consensus, and ongoing cost-efficiency and turnaround efforts as potential catalysts. Here’s Why PayPal Is a Strong Value Stock
• Positive Sentiment: PayPal was highlighted in a payments-industry outlook alongside Visa, Mastercard, Fidelity and WEX, keeping attention on the company’s potential relative value and competitive position. Zacks Industry Outlook: Visa, Mastercard, PayPal, Fidelity and WEX
• Positive Sentiment: An analyst upgrade provided additional support for PayPal’s investment case, reinforcing the view that the shares may be undervalued following their long-term decline. PayPal Trading Up After Analyst Upgrade
• Neutral Sentiment: Activist investor Carl Icahn is urging eBay to overhaul its board and spin off PayPal, citing governance concerns and potential conflicts. A separation could increase PayPal’s strategic independence, but the proposal remains uncertain and primarily targets eBay. What Does eBay Face After Carl Icahn Demands a Board Overhaul?
• Negative Sentiment: PayPal’s shares remain below the $60.50 bid previously rejected by its board, signaling that investors are skeptical a transaction will materialize or that the company can justify a higher valuation without further operational proof. PayPal Still Trades Below the $60.50 Bid Its Board Turned Down
• Negative Sentiment: Although PayPal appears inexpensive on earnings, analysts also flag weaker growth, leaving investors dependent on successful execution of the turnaround and cost-cutting plans. PayPal Stock Looks Undervalued on Earnings but Weaker on Growth

Wall Street Analyst Weigh In

A number of brokerages have commented on PYPL. Cantor Fitzgerald boosted their target price on PayPal from $54.00 to $60.00 and gave the company a “neutral” rating in a research note on Monday. HSBC assumed coverage on PayPal in a research note on Friday, July 24th. They set a “buy” rating for the company. Morgan Stanley set a $45.00 price objective on PayPal in a report on Wednesday, July 29th. Truist Financial set a $59.00 target price on shares of PayPal in a research report on Wednesday. Finally, The Goldman Sachs Group set a $50.00 target price on shares of PayPal in a research report on Tuesday, July 28th. Nine equities research analysts have rated the stock with a Buy rating, thirty-four have assigned a Hold rating and four have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Hold” and an average price target of $55.72.

PayPal Stock Performance

The stock has a market cap of $50.53 billion, a P/E ratio of 11.17, a P/E/G ratio of 1.41 and a beta of 1.30. The firm has a 50 day moving average of $48.18 and a two-hundred day moving average of $47.07. The company has a debt-to-equity ratio of 0.55, a quick ratio of 1.29 and a current ratio of 1.29.

PayPal (NASDAQ:PYPL) last issued its quarterly earnings results on Tuesday, July 28th. The credit services provider reported $1.38 EPS for the quarter, topping analysts’ consensus estimates of $1.28 by $0.10. PayPal had a return on equity of 24.39% and a net margin of 14.36%.The company had revenue of $8.68 billion during the quarter, compared to analyst estimates of $8.47 billion. During the same period in the previous year, the company earned $1.40 earnings per share. The company’s quarterly revenue was up 4.8% compared to the same quarter last year. On average, research analysts predict that PayPal Holdings, Inc. will post 5.37 EPS for the current fiscal year.

PayPal Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, September 25th. Stockholders of record on Friday, September 4th will be given a dividend of $0.14 per share. The ex-dividend date of this dividend is Friday, September 4th. This represents a $0.56 dividend on an annualized basis and a dividend yield of 0.9%. PayPal’s dividend payout ratio is currently 10.59%.

Insider Activity at PayPal

In related news, CAO Chris Natali sold 1,337 shares of PayPal stock in a transaction dated Wednesday, July 29th. The stock was sold at an average price of $58.10, for a total transaction of $77,679.70. Following the sale, the chief accounting officer directly owned 2,216 shares of the company’s stock, valued at $128,749.60. This trade represents a 37.63% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Suzan Kereere sold 3,379 shares of the company’s stock in a transaction that occurred on Wednesday, June 3rd. The shares were sold at an average price of $42.79, for a total value of $144,587.41. Following the completion of the transaction, the insider directly owned 30,983 shares of the company’s stock, valued at approximately $1,325,762.57. This trade represents a 9.83% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders sold 10,612 shares of company stock worth $484,534. Company insiders own 0.63% of the company’s stock.

Institutional Investors Weigh In On PayPal

Large investors have recently modified their holdings of the stock. Bard Associates Inc. acquired a new position in PayPal during the fourth quarter worth $25,000. Allied Private Wealth LLC acquired a new stake in shares of PayPal during the 2nd quarter worth about $25,000. Robinswood Financial LLC acquired a new stake in shares of PayPal during the 1st quarter worth about $26,000. Caitong International Asset Management Co. Ltd lifted its holdings in PayPal by 15,233.3% during the 4th quarter. Caitong International Asset Management Co. Ltd now owns 460 shares of the credit services provider’s stock valued at $27,000 after purchasing an additional 457 shares during the last quarter. Finally, Safe Harbor Fiduciary LLC acquired a new position in PayPal in the fourth quarter valued at about $28,000. 68.32% of the stock is currently owned by institutional investors.

About PayPal

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.