PayPal (NASDAQ:PYPL) Sets New 12-Month Low After Analyst Downgrade

Key Points

• Rothschild & Co Redburn cut its price target on PayPal from $50 to $32 and kept a sell rating, sending the stock to a new 52‑week low of $38.49 on heavy volume.
• PayPal missed Q4 revenue and EPS estimates, replaced its CEO amid disappointing execution, and now faces increased analyst downgrades and a securities‑law investigation, adding near‑term downside risk.
• Despite the weakness, PayPal has a market cap of about $35.6 billion, a P/E of 7.15, declared a $0.14 quarterly dividend (1.4% yield), and roughly 68% of the stock is institutionally owned.

PayPal Holdings, Inc. (NASDAQ:PYPL - Get Free Report)'s share price hit a new 52-week low during trading on Thursday after Rothschild & Co Redburn lowered their price target on the stock from $50.00 to $32.00. Rothschild & Co Redburn currently has a sell rating on the stock. PayPal traded as low as $38.49 and last traded at $38.6710, with a volume of 13040611 shares. The stock had previously closed at $40.46.

Other equities analysts have also recently issued reports about the stock. TD Cowen reiterated a "hold" rating on shares of PayPal in a research note on Tuesday, February 3rd. BNP Paribas Exane decreased their price objective on shares of PayPal from $71.00 to $69.00 and set a "neutral" rating for the company in a research report on Tuesday, December 2nd. Wells Fargo & Company lowered their target price on shares of PayPal from $67.00 to $48.00 and set an "equal weight" rating on the stock in a research note on Wednesday, February 4th. Robert W. Baird set a $52.00 price target on PayPal in a research note on Wednesday, February 4th. Finally, Citizens Jmp reaffirmed a "market perform" rating on shares of PayPal in a report on Wednesday, February 4th. Ten analysts have rated the stock with a Buy rating, thirty have given a Hold rating and four have assigned a Sell rating to the stock. According to MarketBeat.com, the company has an average rating of "Hold" and an average target price of $61.03.

Insider Transactions at PayPal

In related news, EVP Frank Keller sold 3,478 shares of the stock in a transaction that occurred on Friday, February 6th. The stock was sold at an average price of $40.20, for a total value of $139,815.60. Following the completion of the sale, the executive vice president owned 51,567 shares of the company's stock, valued at approximately $2,072,993.40. This trade represents a 6.32% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, insider Suzan Kereere sold 4,162 shares of PayPal stock in a transaction that occurred on Wednesday, November 19th. The stock was sold at an average price of $59.84, for a total value of $249,054.08. Following the transaction, the insider owned 30,983 shares in the company, valued at approximately $1,854,022.72. The trade was a 11.84% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 0.08% of the stock is currently owned by corporate insiders.

More PayPal News

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: Partnership: PayPal teamed with Sabre and Mindtrip to build an end‑to‑end agentic AI travel experience — a commercial partnership that could open new travel payments volume and enterprise use cases if it scales. Sabre, PayPal, and Mindtrip partner to deliver the industry's first end-to-end agentic AI experience for travel
• Neutral Sentiment: Leadership/strategy: PayPal named Enrique Lores (ex‑HP) as CEO to replace Alex Chriss; coverage notes a renewed push into embedded/automotive payments and a strategy reset — potential long‑term positives but execution and timing are uncertain. PayPal Shifts Gears With New CEO And Automotive Payments Push
• Negative Sentiment: Earnings and outlook: Q4 revenue and EPS missed expectations and management cited disappointing execution, which precipitated the leadership change and undermined investor confidence. PayPal Holdings, Inc. (PYPL) Faces Pressure as Revenue Falls Short and CEO Change Looms
• Negative Sentiment: Analyst downgrades and sell signals: Multiple firms have turned negative — Rothschild & Co Redburn cut its price target to $32 and kept a sell rating; Zacks added PYPL to its Strong Sell list; Cantor Fitzgerald and Truist issued pessimistic notes — increasing near‑term downside risk. Rothschild & Co Redburn adjusts price target on PayPal to $32 from $50, maintains sell rating New Strong Sell Stocks for February 12th
• Negative Sentiment: Investigation risk: Law firm Kessler Topaz is investigating potential securities‑law violations tied to the surprise CEO replacement and the company’s disclosures around Q4, adding legal overhang. NASDAQ: PYPL Investigation Alert - Kessler Topaz Meltzer & Check, LLP Encourages PayPal Investors to Contact the Firm

Institutional Trading of PayPal

A number of hedge funds and other institutional investors have recently modified their holdings of PYPL. Wedbush Securities Inc. boosted its holdings in PayPal by 9.4% during the 4th quarter. Wedbush Securities Inc. now owns 20,009 shares of the credit services provider's stock valued at $1,168,000 after acquiring an additional 1,712 shares during the period. McMillan Office Inc. acquired a new position in shares of PayPal in the fourth quarter valued at approximately $6,357,000. denkapparat Operations GmbH lifted its holdings in PayPal by 29.7% during the 4th quarter. denkapparat Operations GmbH now owns 19,112 shares of the credit services provider's stock worth $1,116,000 after buying an additional 4,380 shares in the last quarter. Alps Advisors Inc. grew its stake in shares of PayPal by 4.4% in the fourth quarter. Alps Advisors Inc. now owns 20,645 shares of the credit services provider's stock worth $1,205,000 after acquiring an additional 874 shares in the last quarter. Finally, Colonial Trust Co SC increased its position in shares of PayPal by 13.7% during the fourth quarter. Colonial Trust Co SC now owns 3,558 shares of the credit services provider's stock worth $208,000 after acquiring an additional 428 shares during the period. 68.32% of the stock is owned by institutional investors and hedge funds.

PayPal Stock Performance

The firm has a market capitalization of $35.64 billion, a price-to-earnings ratio of 7.15, a PEG ratio of 1.07 and a beta of 1.43. The firm has a 50 day moving average price of $55.91 and a 200-day moving average price of $63.59. The company has a debt-to-equity ratio of 0.49, a current ratio of 1.29 and a quick ratio of 1.29.

PayPal (NASDAQ:PYPL - Get Free Report) last posted its quarterly earnings results on Tuesday, February 3rd. The credit services provider reported $1.23 EPS for the quarter, missing the consensus estimate of $1.29 by ($0.06). The firm had revenue of $8.68 billion for the quarter, compared to analyst estimates of $8.82 billion. PayPal had a return on equity of 25.42% and a net margin of 15.77%.The company's revenue was up 4.0% on a year-over-year basis. During the same quarter last year, the firm earned $1.19 EPS. As a group, sell-side analysts expect that PayPal Holdings, Inc. will post 5.03 earnings per share for the current fiscal year.

PayPal Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Wednesday, March 25th. Investors of record on Wednesday, March 4th will be given a $0.14 dividend. This represents a $0.56 annualized dividend and a yield of 1.4%. The ex-dividend date is Wednesday, March 4th. PayPal's payout ratio is 10.35%.

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.

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