PayPal (NASDAQ:PYPL) Stock Sees Unusually High Call Option Buying

PayPal Holdings, Inc. (NASDAQ:PYPL) saw unusually large options trading activity on Friday. Investors acquired 124,897 call options on the company. This is an increase of 62% compared to the average daily volume of 76,999 call options.

Trending Headlines about PayPal

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: Renewed takeover interest: Reports of a potential acquisition have resurfaced, providing a significant near-term catalyst for PayPal’s shares. No formal offer or confirmed bidder has been announced, so the speculation remains unverified. PayPal Stock Jumps as New Takeover Reports Surface
• Positive Sentiment: Meta AI-shopping integration: Meta is adding PayPal checkout to Muse, its AI shopping assistant, allowing users to move from product discovery to payment within the ecosystem. Investors view the deal as evidence that PayPal’s merchant network could benefit from the growth of “agentic commerce,” including future shopping through Meta’s AI glasses. PayPal rises as Meta adds PayPal checkout to Muse shopping ecosystem
• Positive Sentiment: Strategic value highlighted: A hedge fund manager suggested Meta could acquire PayPal for approximately $90 billion to accelerate its super-app ambitions and compete with Elon Musk’s X. The proposal reinforces the strategic value investors may assign to PayPal’s global payments infrastructure, although it is not a reported bid. Mark Zuckerberg Buying PayPal Could Save Meta 5-10 Years
• Neutral Sentiment: Mixed ownership signals: Some large institutions, including Invesco and Amundi, increased their positions, while other funds reduced or exited holdings. Insider activity has been predominantly selling, despite one recent finance executive purchase, creating a mixed signal for investors.
• Negative Sentiment: Valuation and execution risks remain: The reported median analyst price target is $48, below the stock’s referenced trading level, with several targets in the low-to-mid $40s. Investors may also remain cautious after recent share-price weakness and PayPal’s modest underlying revenue growth, despite its latest earnings and revenue beat.

Analysts Set New Price Targets

Several research firms have recently commented on PYPL. HSBC began coverage on PayPal in a research note on Friday, July 24th. They issued a “buy” rating for the company. TD Cowen raised their price target on PayPal from $48.00 to $59.00 and gave the company a “hold” rating in a report on Wednesday, July 29th. Argus set a $70.00 price objective on PayPal in a research report on Wednesday, July 29th. Jefferies Financial Group raised shares of PayPal from a “hold” rating to a “buy” rating in a research note on Tuesday, July 28th. Finally, William Blair reiterated a “market perform” rating on shares of PayPal in a research report on Wednesday, July 15th. Nine analysts have rated the stock with a Buy rating, thirty-four have assigned a Hold rating and four have assigned a Sell rating to the company. According to MarketBeat.com, PayPal has an average rating of “Hold” and an average price target of $56.31.

PayPal Trading Up 5.3%

Shares of PayPal stock traded up $2.79 during trading on Friday, hitting $55.39. 12,760,440 shares of the company were exchanged, compared to its average volume of 17,960,855. The company has a debt-to-equity ratio of 0.55, a current ratio of 1.29 and a quick ratio of 1.29. The firm has a market capitalization of $47.38 billion, a P/E ratio of 10.46, a price-to-earnings-growth ratio of 1.13 and a beta of 1.28. The firm’s fifty day moving average price is $56.79 and its 200 day moving average price is $49.46. PayPal has a 1-year low of $38.46 and a 1-year high of $79.21.

PayPal (NASDAQ:PYPL) last announced its quarterly earnings results on Tuesday, July 28th. The credit services provider reported $1.38 earnings per share for the quarter, beating analysts’ consensus estimates of $1.28 by $0.10. PayPal had a net margin of 14.36% and a return on equity of 24.39%. The business had revenue of $8.68 billion for the quarter, compared to the consensus estimate of $8.47 billion. During the same period last year, the company posted $1.40 EPS. PayPal’s revenue for the quarter was up 4.8% on a year-over-year basis. As a group, sell-side analysts expect that PayPal will post 5.38 earnings per share for the current fiscal year.

PayPal Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Friday, September 25th. Shareholders of record on Friday, September 4th will be issued a $0.14 dividend. The ex-dividend date is Friday, September 4th. This represents a $0.56 annualized dividend and a yield of 1.0%. PayPal’s dividend payout ratio (DPR) is 10.59%.

Insiders Place Their Bets

In related news, insider Suzan Kereere sold 4,162 shares of the firm’s stock in a transaction that occurred on Tuesday, August 18th. The shares were sold at an average price of $60.96, for a total value of $253,715.52. Following the completion of the sale, the insider owned 30,983 shares of the company’s stock, valued at $1,888,723.68. This trade represents a 11.84% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Frank Keller sold 4,612 shares of the business’s stock in a transaction that occurred on Thursday, September 3rd. The stock was sold at an average price of $55.43, for a total transaction of $255,643.16. Following the completion of the transaction, the insider owned 41,567 shares of the company’s stock, valued at $2,304,058.81. This trade represents a 9.99% 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 three months, insiders sold 14,774 shares of company stock valued at $848,095. Insiders own 0.63% of the company’s stock.

Hedge Funds Weigh In On PayPal

Several institutional investors and hedge funds have recently made changes to their positions in PYPL. Bard Associates Inc. bought a new position in PayPal during the fourth quarter worth about $25,000. Allied Private Wealth LLC acquired a new stake in shares of PayPal during the second quarter worth about $25,000. Robinswood Financial LLC acquired a new stake in shares of PayPal during the first quarter worth about $26,000. Caitong International Asset Management Co. Ltd lifted its holdings in shares of 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 in the last quarter. Finally, Mowery & Schoenfeld Wealth Management LLC acquired a new position in shares of PayPal in the 2nd quarter valued at approximately $27,000. Institutional investors and hedge funds own 68.32% of the company’s stock.

PayPal Company Profile

PayPal Holdings, Inc is a digital payments and financial technology company that operates a global platform for consumers and businesses. Its services enable customers to send and receive money, make purchases online and in stores, and accept payments through digital checkout solutions. PayPal supports transactions using linked bank accounts, debit and credit cards, stored balances and other payment methods.

The company’s consumer and merchant offerings include the PayPal wallet, PayPal Checkout, PayPal Zettle point-of-sale tools, PayPal Braintree payment processing and PayPal Complete Payments.