PayPal Posts Mixed Q2 Results; Shares Fall 5.3%

Online payments company PayPal Holdings, Inc. (PYPL) has reported mixed results for the second quarter ended June 30, 2021. Following the earnings, shares of the company fell 5.3% to close at $286 in the extended trading session.

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Quarterly net revenues stood at $6.24 billion, missing the Street’s estimate of $6.27 billion. Net revenues, however, rose 19% from last year on the back of 23.4% growth witnessed in the U.S. net revenues.

Notably, the company reported earnings per share (EPS) of $1.15, up 7.5% from last year. Moreover, it topped the Street’s estimate of $1.13.

Further, the company provided guidance for the next quarter and also for FY 2021. For Q3, the company expects EPS of $1.07 and revenues to be in the range of $6.15 billion to $6.25 billion. For FY 2021, the company expects EPS and revenue of $4.70 and $25.75 billion, respectively.

The CEO of PayPal, Dan Schulman, said, “On the heels of a record year, we continued to drive strong results in the second quarter, reflecting some of the best performance in our history. Our platform now supports 403 million active accounts, with an annualized TPV run rate of approximately $1.25 trillion. Clearly PayPal has evolved into an essential service in the emerging digital economy.” (See PayPal stock chart on TipRanks)

On July 28, Mizuho Securities analyst Dan Dolev reiterated a Buy rating on the stock with a price target of $375. The analyst’s price target implies upside potential of 24.2% from current levels.

Consensus among analysts is a Strong Buy based on 23 Buys and 3 Holds. The average PayPal price target of $328.76 implies upside potential of 8.9% from current levels.

PayPal scores a 7 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock will perform in line with the market expectations. Shares have gained 63.6% over the past year.