There is no way PayPal Holdings Inc. (PYPL) can keep these numbers up

PayPal Holdings Inc. (NASDAQ: PYPL) stock jumped 1.20% on Friday to $89.63 against a previous-day closing price of $88.57. With 18.53 million shares changed hands, the volume of the stock remained heavier than its average volume of 15.45 million shares. During the session, the Credit Services company that operates in wider Financial sector, reached to the highest price of $90.66 whereas the lowest price it dropped to was $86.91. The 52-week range on PYPL shows that it touched its highest point at $296.70 and its lowest point at $67.58 during that stretch. It currently has a 1-year price target of $112.62. Beta for the stock currently stands at 1.48.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of PYPL was up-trending over the past week, with a rise of 16.34%, but this was up by 25.53% over a month. Three-month performance dropped to -2.08% while six-month performance fell -47.87%. The stock lost -66.92% in the past year, while it has lost -52.47% so far this year. A look at the trailing 12-month EPS for PYPL yields 3.02 with Next year EPS estimates of 4.69. For the next quarter, that number is 0.86. This implies an EPS growth rate of -0.70% for this year and 22.58% for next year. EPS is expected to grow by 13.47% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 25.00%.

Float and Shares Shorts:

At present, 1.16 billion PYPL shares are outstanding with a float of 1.16 billion shares on hand for trading. On Jul 14, 2022, short shares totaled 22.95 million, which was 1.98% higher than short shares on Jun 14, 2022. In addition to Mr. Daniel H. Schulman as the firm’s Pres, CEO & Director, Mr. Jonathan Saul Auerbach serves as its Exec. VP and Chief Strategy, Growth & Data Officer.

Institutional Ownership:

Through their ownership of 75.22% of PYPL’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 6.24% of PYPL, in contrast to 38.83% held by mutual funds. Shares owned by individuals account for 36.44%. As the largest shareholder in PYPL with 7.75% of the stake, The Vanguard Group, Inc. holds 89,731,666 shares worth 89,731,666. A second-largest stockholder of PYPL, BlackRock Fund Advisors, holds 49,936,323 shares, controlling over 4.31% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in PYPL, holding 45,664,186 shares or 3.94% stake. With a 2.95% stake in PYPL, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 34,149,940 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.21% of PYPL stock, is the second-largest Mutual Fund holder. It holds 25,633,062 shares valued at 1.79 billion. Invesco QQQ Trust holds 1.45% of the stake in PYPL, owning 16,773,244 shares worth 1.17 billion.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2022, PYPL reported revenue of $6.48B and operating income of $747.00M. Over the past year, revenue came in at $25.82B while operating income stood at $3.93B. It generated $509.00M net income for the quarter, which came to $3.58B over the last twelve months. The EBITDA in the recently reported quarter was $1.04B and diluted EPS was $0.43. EBITDA for the full year was $5.24B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for PYPL since 49 analysts follow the stock currently. There are 30 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 14 believe that the stock is worth HOLDING, 4 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With PYPL analysts setting a high price target of $160.00 and a low target of $75.00, the average target price over the next 12 months is $109.25. Based on these targets, PYPL could surge 78.51% to reach the target high and fall by -16.32% to reach the target low. Reaching the average price target will result in a growth of 21.89% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. PYPL will report FY 2022 earnings on 02/01/2023. Analysts have provided yearly estimates in a range of $3.94 being high and $3.57 being low. For PYPL, this leads to a yearly average estimate of $3.83. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. PayPal Holdings Inc. surprised analysts by $0.00 when it reported $0.88 EPS against a consensus estimate of $0.88. The surprise factor in the prior quarter was -$0.01. Based on analyst estimates, the high estimate for the next quarter is $1.12 and the low estimate is $0.76. The average estimate for the next quarter is thus $0.87.

Summary of Insider Activity:

Insiders traded PYPL stock several times over the past three months with 14 Buys and 2 Sells. In these transactions, 45,884 shares were bought while 15,843 shares were sold. The number of buy transactions has increased to 80 while that of sell transactions has risen to 75 over the past year. The total number of shares bought during that period was 1,095,578 while 616,844 shares were sold.

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