PayPal Holdings initially lost over 6.5% of its value on today's pre-market trading to dive below $80 per share one more time. The round figure represents a psychologically important surface. A technical breakout of the ascending channel since July 25, which has begun below $60, if confirmed, would interrupt a 40% recovery rally for the stock. Meanwhile, financial indicators of PayPal could be called somewhat mixed, rather than weak. In case if a late response to follow the first negative spike on charts may allow PayPal to hold well above the $80 threshold on closing price over the next couple of days, that will be a pretty good sign to pave the way to the next $103 target as a peaking price of August 2022. At least, fundamental data can indicate things to come according to a positive scenario over more than a six month time horizon.
The service to link classic credit cards to online wallets with 25 years of digital payment experience just reported its earnings of $1.20, which was 12% better than the Wall Street's consensus forecast of $1.07, for the period ended September 30, 2024. The latest number was surely not a disappointment, as it nearly corresponded to the average performance for the first three quarters of the last year. However, PayPal's adjusted profit reached $1.48 per share in the Christmas quarter and $1.40 per share from January to March. The firm's revenue fell only $30 million short of preliminary $7.88 billion estimates accomplished by large funds' analyst pool, compared to $7.8 billion on average for the previous two quarters and $7.42 billion in the same period of 2023. The revenue grew 6% YoY. Total volume of payments added 9%, while payment transactions rose 6% and customers' active accounts rose by 0.9% to 432 million all over the world. Its GAAP operating margin increased 198 basis points to 17.7%. And so, the march towards progress, instead of regress, goes on, even though the service needs to work on higher efficiency per unit of gross proceeds, which may be challenging against crypto exchanges competitive environment.
"We are making solid progress in our transformation as we bring new innovations to market, forge important partnerships with leading commerce players, and drive awareness and engagement through new marketing campaigns", said Paypal CEO Alex Chriss. For the current quarter, PayPal also sees its revenue growth "in the low single digits" and "high teens growth" in profit lines, updated from the company's previous outlook of "low to mid-teens", supposedly helped by a "price-to-value strategy" and "focus on profitable growth". They returned $1.8 billion to stockholders through a buyback program during the last quarter.
PayPal's stock price closed at $83.59 only a day before the Q3 earnings report. Technically, this means PayPal stock to be a buy if the ultimate size of a retracement fits into a frame within $80 to $82.50 when looking at charts after a week or so. Any attempts to break above $83.50 on daily close would point to a stronger buy signal.
