‘Rocket ship may fall back to earth.
The company reported third-quarter earnings that beat Wall Street estimates, but the stock was down 6.4% to $ 177.20 per hour due to fourth-quarter guidance, closing growth due to fourth-quarter guidance is.
Wall Street had high expectations for the PayPal (ticker: PYPL) stock in the quarter. The stock has gained 72% this year due to an epidemic for the company’s online and mobile platforms.
PayPal has seen an increase in new account and payment volumes, and its latest results beat forecasts on various metrics. Net revenue was up 25% to $ 5.5 billion, beating the forecast for $ 5.4 billion. Total payment volume rose 36% to $ 247 billion, beating estimates for $ 232 billion. And the company reported adjusted earnings of $ 1.07 per share, ahead of its estimate of $ 0.94.
CEO Dan Shulman described it as one of the “strongest in the PayPal history” quarters and CFO John Rainey said that business remained strong during the quarter.
In fact, the company added 15.2 million accounts in the quarter, a 55% gain from a year earlier, and said it is on track to add a total of 70 million accounts this year, taking its total to 361 million. PayPal’s Venmo peer-to-peer service generated a combined annual revenue of $ 44 billion, up 61% year-over-year. At the rate it operates, the company is in the process of paying approximately $ 1 trillion annually.
But PayPal’s guidance could ease Wall Street. While the company forecasts for the full year, it expects adjusted earnings to grow from 17% to 18% in the fourth quarter, down from a 41% growth rate in the third quarter. Revenue is expected to range from 20% to 25%. The midway mark will be lower than the third quarter revenue growth. The increase in total payment volume will be in the low to mid 30% range, Pepple said, also indicating growth is growing.
The company said the acquisition expense would be three cents a share from adjusted earnings in the fourth quarter. And the company said stock-based compensation would result in a haircut of $ 525 million in non-GAAP income.
earlier in the day,
Maintained an overweight rating on the stock and raised its price target from $ 210 to $ 229. Until PayPal can reassure analysts, those targets can be revisited until its growth rate can be recaptured.
Baron’s September’s cover story was booming with PayPal
(MA), and other companies in the payment ecosystem.
Write Daren Fonda at [email protected]