PayPal (NASDAQ:PYPL) Shares Gap Up – Here’s What Happened

Shares of PayPal Holdings, Inc. (NASDAQ:PYPL) gapped up prior to trading on Wednesday . The stock had previously closed at $47.37, but opened at $54.85. PayPal shares last traded at $54.7720, with a volume of 31,831,140 shares traded.

PayPal News Summary

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: PayPal surged after reports that Stripe and Advent made a $53 billion acquisition offer at $60.50 per share, creating a takeover premium and boosting investor optimism. Reuters: Stripe, Advent offer to buy PayPal for more than $53 billion
• Positive Sentiment: Analysts and investors are arguing the bid undervalues PayPal, with some estimates pointing to a higher fair value around $70 a share or more, which keeps takeover speculation alive. Article: Cantor sees potential for higher PayPal offer as analysis suggests $70/share value
• Neutral Sentiment: Barclays raised its price target to $55 and Canaccord lifted its target to $55, signaling some improvement in outlook, though both targets remain below the recent trading level. Article: Paypal (PYPL) Gains As Market Dips: What You Should Know
• Neutral Sentiment: PayPal’s board is reportedly viewing the Stripe-Advent proposal as inadequate, suggesting negotiations could continue and the final outcome is still uncertain. Reuters: PayPal board sees Stripe-Advent offer as inadequate, sources say
• Negative Sentiment: Regulatory and financing hurdles could complicate or delay any deal, which may temper some of the takeover enthusiasm if no quick resolution emerges. Reuters: PayPal board sees Stripe-Advent offer as inadequate, sources say

Analyst Upgrades and Downgrades

PYPL has been the topic of several recent research reports. Loop Capital assumed coverage on shares of PayPal in a research note on Tuesday, March 31st. They issued a “hold” rating and a $46.00 price target on the stock. Citigroup raised their price objective on PayPal from $42.00 to $48.00 and gave the company a “neutral” rating in a report on Wednesday, April 8th. The Goldman Sachs Group lifted their target price on PayPal from $41.00 to $48.00 and gave the company a “sell” rating in a research report on Thursday, July 9th. BTIG Research reiterated a “neutral” rating on shares of PayPal in a research note on Wednesday. Finally, Cantor Fitzgerald reaffirmed a “neutral” rating on shares of PayPal in a research report on Thursday. Seven equities research analysts have rated the stock with a Buy rating, thirty-three have given a Hold rating and five have given a Sell rating to the company. According to MarketBeat.com, the stock presently has an average rating of “Hold” and a consensus target price of $54.61.

PayPal Stock Up 2.2%

The company has a quick ratio of 1.26, a current ratio of 1.26 and a debt-to-equity ratio of 0.47. The firm has a 50 day simple moving average of $44.37 and a 200-day simple moving average of $47.16. The stock has a market cap of $50.04 billion, a P/E ratio of 10.64, a price-to-earnings-growth ratio of 1.39 and a beta of 1.33.

PayPal (NASDAQ:PYPL) last issued its earnings results on Tuesday, May 5th. The credit services provider reported $1.34 EPS for the quarter, topping the consensus estimate of $1.27 by $0.07. The company had revenue of $8.35 billion during the quarter, compared to the consensus estimate of $8.05 billion. PayPal had a return on equity of 25.02% and a net margin of 15.00%.The firm’s revenue for the quarter was up 7.2% compared to the same quarter last year. During the same period in the previous year, the company posted $1.33 EPS. On average, equities research analysts forecast that PayPal Holdings, Inc. will post 5.32 earnings per share for the current fiscal year.

PayPal Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Thursday, June 25th. Shareholders of record on Thursday, June 4th were issued a dividend of $0.14 per share. The ex-dividend date of this dividend was Thursday, June 4th. This represents a $0.56 annualized dividend and a yield of 1.0%. PayPal’s dividend payout ratio (DPR) is currently 10.51%.

Insiders Place Their Bets

In related news, CAO Chris Natali sold 1,337 shares of PayPal stock in a transaction dated Wednesday, April 29th. The shares were sold at an average price of $49.46, for a total transaction of $66,128.02. Following the completion of the sale, the chief accounting officer owned 1,586 shares of the company’s stock, valued at approximately $78,443.56. The trade was a 45.74% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. 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 dated Wednesday, June 3rd. The shares were sold at an average price of $42.79, for a total transaction of $144,587.41. Following the completion of the transaction, the insider owned 30,983 shares in the company, 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. Insiders sold a total of 20,612 shares of company stock valued at $966,623 over the last ninety days. 0.63% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On PayPal

Several hedge funds have recently bought and sold shares of the stock. Maia Wealth LLC lifted its holdings in PayPal by 2.5% during the 3rd quarter. Maia Wealth LLC now owns 6,404 shares of the credit services provider’s stock worth $424,000 after purchasing an additional 155 shares during the last quarter. GeoWealth Management LLC grew its holdings in PayPal by 6.2% in the 3rd quarter. GeoWealth Management LLC now owns 3,214 shares of the credit services provider’s stock valued at $216,000 after buying an additional 188 shares in the last quarter. Harrell Investment Partners LLC grew its holdings in PayPal by 2.1% in the 4th quarter. Harrell Investment Partners LLC now owns 9,374 shares of the credit services provider’s stock valued at $547,000 after buying an additional 189 shares in the last quarter. Formidable Asset Management LLC increased its position in PayPal by 0.8% during the 1st quarter. Formidable Asset Management LLC now owns 25,937 shares of the credit services provider’s stock worth $1,173,000 after buying an additional 205 shares during the period. Finally, KPP Advisory Services LLC increased its position in PayPal by 3.3% during the 1st quarter. KPP Advisory Services LLC now owns 6,625 shares of the credit services provider’s stock worth $300,000 after buying an additional 214 shares during the period. 68.32% of the stock is currently owned by institutional investors and hedge funds.

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.