Business NewsSilicon Valley Insider

PayPal Stock Rallies on Back-to-Back Positive Earnings

In Just Over a Year, PayPal Stock is Down Nearly 65% Thanks in Part to Stagnating Revenues and Shrinking Margins Caused By the Global Pandemic and its Effect on the Supply Chain and Consumer Spending

With the pandemic behind us and PayPal posting its second consecutive positive earnings report in a row, PYPL stock has rallied nearly 40% in the past month and still presents investors with a massive amount of potential upside

PayPal’s (NASDAQ: PYPL) most recent earnings report, published on August 2, 2022, indicates that the company is rounding a corner and improving its business prospects following the worldwide pandemic. PayPal beat analysts’ expectations for revenue ($6.8 billion, beat by $20 million) and non-GAAP EPS ($0.93, beating by $0.06).

The company was able to grow revenues by 9% YoY. Impressive in its own right, it’s even more remarkable given that these results come after eBay (NASDAQ: EBAY) transitioned away from PayPal as its primary payment method. The company did suffer a reduction in its EPS on a YoY basis, but that’s tied to the loss of eBay and shouldn’t affect the company’s plans.

Source: Shutterstock

????Also Read: Why Mark Cuban is Not a Fan of ‘Metaverse’ Digital Real Estate, and You Probably Shouldn’t Be Either

Perhaps most important for the company’s future results are the estimated 10 million new users they expect to add to the platform in 2022; at the end of Q2, total active users were 429 million, up 6% YoY.

Finally, the company’s cash flow has been very promising. After posting $1.2 billion in cash flow from operations during Q1, the company was able to generate $1.5 billion in operational cash flow in Q2. Q2 free cash flow was $1.3 billion, compared to $1.1 billion in Q1.

PayPal’s positive results led the Board of Directors to believe that the stock is undervalued, as the company announced a $15 billion share buyback. This amounts to more than 10% of the company’s current market cap, meaning investors should realize significant gains from the buyback.

Shares of PayPal are currently trading at $103.00 per share, up +1.47% on the day. YTD PYPL stock is down -47.18%.

Learn more about PayPal: Website | Investor Deck | PYPL Chart

* Attention readers on mobile or tablet, if you cannot view the above chart in its entirety, please rotate your device sideways. Make sure you have your portrait orientation lock switched off.

Did you enjoy this article? If so, consider signing up for the Wealthy VC Email Newsletter below to start receiving our free weekly newsletter featuring the week’s best articles.

Follow Wealthy VC on Social Media: Facebook | Instagram | Twitter | LinkedIn | GETTR | Tumblr

????Join the Discussion in the Wealthy VC Investor Group

????Have a Stock Tip or New  Story Suggestion? Email us at Invest@WealthyVC.com

Disclaimer: The Editor of Wealthy VC holds a long position in PYPL.

Shawn V.

Shawn is Marine veteran, originally from the San Francisco Bay Area. Shawn has a BS in Hospitality Management and an MBA, from the University of Nevada. In addition to writing for Wealthy VC, Shawn is also a writer for the financial website Seeking Alpha. Seeking Alpha | Email

Related Articles

Back to top button