PayPal (NASDAQ:PYPL) Trading Down 1.2% – Here’s Why

PayPal Holdings, Inc. (NASDAQ:PYPL) shares were down 1.2% during mid-day trading on Friday . The company traded as low as $58.81 and last traded at $59.07. Approximately 8,285,867 shares changed hands during mid-day trading, a decline of 57% from the average session volume of 19,205,408 shares. The stock had previously closed at $59.78.

Key Headlines Impacting PayPal

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: PayPal continues to screen as a value opportunity after its substantial multiyear decline. Analysts point to relatively attractive valuation metrics, earnings performance above consensus, and ongoing cost-efficiency and turnaround efforts as potential catalysts. Here’s Why PayPal Is a Strong Value Stock
• Positive Sentiment: PayPal was highlighted in a payments-industry outlook alongside Visa, Mastercard, Fidelity and WEX, keeping attention on the company’s potential relative value and competitive position. Zacks Industry Outlook: Visa, Mastercard, PayPal, Fidelity and WEX
• Positive Sentiment: An analyst upgrade provided additional support for PayPal’s investment case, reinforcing the view that the shares may be undervalued following their long-term decline. PayPal Trading Up After Analyst Upgrade
• Neutral Sentiment: Activist investor Carl Icahn is urging eBay to overhaul its board and spin off PayPal, citing governance concerns and potential conflicts. A separation could increase PayPal’s strategic independence, but the proposal remains uncertain and primarily targets eBay. What Does eBay Face After Carl Icahn Demands a Board Overhaul?
• Negative Sentiment: PayPal’s shares remain below the $60.50 bid previously rejected by its board, signaling that investors are skeptical a transaction will materialize or that the company can justify a higher valuation without further operational proof. PayPal Still Trades Below the $60.50 Bid Its Board Turned Down
• Negative Sentiment: Although PayPal appears inexpensive on earnings, analysts also flag weaker growth, leaving investors dependent on successful execution of the turnaround and cost-cutting plans. PayPal Stock Looks Undervalued on Earnings but Weaker on Growth

Analysts Set New Price Targets

Several research analysts have commented on the stock. Telsey Advisory Group downgraded shares of PayPal to a “market perform” rating in a research note on Friday, July 24th. Weiss Ratings reaffirmed a “hold (c-)” rating on shares of PayPal in a research note on Wednesday. Mizuho increased their target price on shares of PayPal from $50.00 to $60.00 and gave the company a “neutral” rating in a report on Wednesday, July 29th. Truist Financial set a $59.00 target price on shares of PayPal in a research report on Wednesday. Finally, Jefferies Financial Group raised shares of PayPal from a “hold” rating to a “buy” rating in a research note on Tuesday, July 28th. Nine analysts have rated the stock with a Buy rating, thirty-four have assigned a Hold rating and four have issued a Sell rating to the company’s stock. Based on data from MarketBeat, the stock currently has an average rating of “Hold” and an average price target of $55.72.

PayPal Price Performance

The company has a quick ratio of 1.29, a current ratio of 1.29 and a debt-to-equity ratio of 0.55. The firm’s 50-day moving average is $48.47 and its 200-day moving average is $47.15. The company has a market cap of $50.53 billion, a PE ratio of 11.17, a PEG ratio of 1.44 and a beta of 1.30.

PayPal (NASDAQ:PYPL) last announced its earnings results on Tuesday, July 28th. The credit services provider reported $1.38 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.28 by $0.10. The firm had revenue of $8.68 billion during the quarter, compared to analyst estimates of $8.47 billion. PayPal had a return on equity of 24.39% and a net margin of 14.36%.The business’s revenue was up 4.8% compared to the same quarter last year. During the same quarter in the prior year, the company earned $1.40 EPS. On average, equities analysts anticipate that PayPal Holdings, Inc. will post 5.37 EPS for the current year.

PayPal Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Friday, September 25th. Stockholders of record on Friday, September 4th will be paid a $0.14 dividend. This represents a $0.56 annualized dividend and a dividend yield of 0.9%. The ex-dividend date is Friday, September 4th. PayPal’s dividend payout ratio is currently 10.59%.

Insider Transactions at PayPal

In other PayPal news, CAO Chris Natali sold 1,337 shares of the company’s stock in a transaction that occurred on Wednesday, July 29th. The shares were sold at an average price of $58.10, for a total transaction of $77,679.70. Following the completion of the sale, the chief accounting officer directly owned 2,216 shares of the company’s stock, valued at approximately $128,749.60. This represents a 37.63% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Frank Keller sold 4,612 shares of PayPal stock in a transaction dated Wednesday, June 3rd. The shares were sold at an average price of $42.54, for a total value of $196,194.48. Following the transaction, the insider directly owned 41,567 shares in the company, valued at approximately $1,768,260.18. The trade was a 9.99% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 10,612 shares of company stock worth $484,534 over the last quarter. 0.63% of the stock is currently owned by insiders.

Institutional Investors Weigh In On PayPal

Institutional investors have recently bought and sold shares of the business. BlackRock Inc. bought a new position in PayPal in the 2nd quarter worth about $3,236,989,000. Norges Bank bought a new stake in shares of PayPal during the fourth quarter valued at approximately $949,758,000. Bank of America Corp DE raised its stake in shares of PayPal by 67.9% during the first quarter. Bank of America Corp DE now owns 25,614,720 shares of the credit services provider’s stock valued at $1,158,554,000 after acquiring an additional 10,356,256 shares in the last quarter. Amundi boosted its holdings in shares of PayPal by 227.6% in the first quarter. Amundi now owns 13,804,208 shares of the credit services provider’s stock valued at $624,364,000 after purchasing an additional 9,590,488 shares during the period. Finally, Bank of New York Mellon Corp purchased a new stake in shares of PayPal in the second quarter valued at approximately $251,215,000. Hedge funds and other institutional investors own 68.32% of the company’s stock.

About PayPal

PayPal Holdings, Inc operates a global digital payments platform that enables consumers and merchants to send and receive payments online, on mobile devices and at the point of sale. The company provides a broad set of payment solutions, including a digital wallet, merchant payment processing, checkout services, invoicing and fraud-management tools. PayPal’s platform is designed to support e-commerce, in-person retail and person-to-person transfers, targeting both individual consumers and businesses of varying sizes.

Key products and services in PayPal’s portfolio include the PayPal wallet and checkout ecosystem, the Venmo peer-to-peer mobile app, Braintree’s developer-focused payment gateway, Xoom for international money transfers, and PayPal Credit and buy-now-pay-later options.