PayPal Stock (NASDAQ:PYPL)
Following remarks from one analyst who maintained a hold recommendation on the company, PayPal stock (NASDAQ:PYPL) was down 1.7% as of 1:17 p.m. ET on Wednesday. When PayPal announces its results for the third quarter on November 3, Jefferies analyst Trevor Williams believes that EPS will be the main focus since it is a critical profitability metric.
Due to sluggish growth after the epidemic, PayPal stock has dropped 55% this year. This analyst believes that a positive earnings surprise will not be enough to drive the PayPal stock price higher.
Then What?
The analyst does not expect PayPal Holdings (NASDAQ:PYPL) to announce any shocks in the forthcoming earnings report. According to Williams, PayPal stock sales will come in lower than Wall Street anticipates. Still, the company’s margins will increase, resulting in better profits per share.
With management attempting to halt the growth in non-transaction-related expenditures, the bottom line is likely to be surpassed.
Revenue growth, however, is now partially outside PayPal’s control since it is subject to the degree of economic activity among consumers and the effect of increased competition in the digital wallet industry.
What Should You Do Now?
In the second quarter, PayPal stock saw revenue rise by 9% year over year. PayPal’s income would have climbed by 14% if not for the loss of volume from eBay’s payments when it switched to its own payments system. According to estimates, PayPal’s third-quarter growth was 10.4% year-on-year.
For a corporation experiencing slowing growth, the PayPal stock price remains high. Compared to the median multiple of 17, PayPal’s future price-to-earnings ratio is now relatively high at 21.
The rate at which PayPal Holdings (NASDAQ:PYPL) market share is being eroded by rivals may best be gauged by looking at the company’s net increase in active accounts. According to management, a higher figure than the 400,000 accounts created in the second quarter is anticipated.
Featured Image- Megapixl @ Vladakingdom
Author Shariq Khan 
