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PayPal Tanks as Outlook Disappoints, Analysts Cut Price Targets -Breaking

by Mike Robinson

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© Reuters.

By Dhirendra Tripathi

Investing.com – PayPal stock (NASDAQ:) plummeted more than 12% Tuesday as the payments company lowered its outlook for sales and the volumes it will process during the year.

PayPal released a statement saying that third-quarter sales suffered because transactions related to eBay (NASDAQ:) market dipped 45%. That led to the company missing analysts’ forecast for third-quarter sales. There were a lot of downgrades that followed.   

PayPal predicts that revenue for 2021 will rise by 18% to $25.35 Billion at the midpoint. This compares to 20% growth PayPal had predicted.

Also, it lowered its top-end growth projection for total payment volume processed to 34% (from 35% earlier). It maintained the lowest end of 33% growth.

Ebay’s share of PayPal’s TPV more than halved to 3%. Although this was to be expected as the partners ended their long-term partnership in 2018, the rate of decline could surprise the payments company.

Chief Executive Officer Dan Schulman attempted to paint the company’s agreement with Amazon (NASDAQ:) as the next big thing. The company said the tie-up will enable Venmo’s 80+ million users in the U.S. to pay with Venmo on Amazon starting next year.

The third quarter net revenue rose by 13% to $6.18billion. The profit per share was $1.11, which is higher than the estimates.

Piper Sandler has lowered the target price for PayPal shares from $280 to $280. Truist Securities rates them at $200 Deutsche, RBC and Rosenblatt have also reduced their targets. So far, the stock has fallen to $200.83

 

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