PayPal Holdings (PYPL), a financial technology company, will release its Q4 financials today. PayPal stock has gained over 44% in the past year, fueled by products like the “Fastlane” guest checkout, collaborations with companies like Amazon (AMZN), and strong execution. However, Wall Street analysts expect the company to report earnings of $1.13 per share, representing a 24% decrease year-over-year.
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Meanwhile, revenues are expected to grow by 3% from the year-ago quarter to $8.27 billion, according to data from the TipRanks Forecast page. Notably, PayPal missed EPS estimates only twice out of the last nine quarters.
Analysts’ Views on PYPL Ahead of Q4 Results
Ahead of PayPal’s Q4 results, analyst Gustavo Gala of Monness raised his price target from $110 to $120 and maintained a Buy rating. The firm expects PayPal’s transaction margins to improve, even if growth is not steady. He remains optimistic about the company’s future growth, despite rising competition in the payments sector.
Similarly, analyst Tien Tsin Huang of J.P. Morgan maintained a Buy rating on PYPL and maintained his price target of $90.00. The analyst is positive about the company’s strong position in digital commerce, brand recognition, and a large user base.
On the contrary, analyst Harshita Rawat of Bernstein has maintained a Hold rating on PayPal. Rawat points out challenges, including competition from services like Apple Pay and concerns about Braintree’s pricing approach. She also highlights tax rate uncertainties from international policy changes and lower interest rates affecting PYPL’s gross profit growth.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 8.20% move in either direction.
Is PYPL Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PayPal stock based on eleven Buys and ten Holds assigned in the past three months, as indicated by the graphic below. The average PYPL price target of $97.28 per share implies 8.68% upside potential.
