PayPal (NASDAQ:PYPL) Shares Up 1.7% - Should You Buy?

Key Points

• PayPal shares rose 1.7% to $62.30, supported partly by speculation that Stripe and Advent International could pursue a transaction, although no offer has been announced.
• PayPal’s latest quarterly results exceeded expectations, with adjusted earnings of $1.38 per share and revenue of $8.68 billion, while new tuition-payment integrations could expand transaction volumes.
• Analysts remain cautious overall, with a consensus “Hold” rating and $56.28 price target; competition from services such as TikTok’s potential peer-to-peer payments and valuation concerns remain key risks.

PayPal Holdings, Inc. (NASDAQ:PYPL - Get Free Report) traded up 1.7% during mid-day trading on Thursday . The stock traded as high as $62.73 and last traded at $62.30. 11,871,477 shares traded hands during mid-day trading, a decline of 36% from the average session volume of 18,691,969 shares. The stock had previously closed at $61.25.

Key Headlines Impacting PayPal

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: Takeover speculation supports the shares. Reports of a possible sale process involving Stripe and Advent International have revived expectations that PayPal could attract a strategic or private-equity bid. No offer has been announced, making this a speculative catalyst dependent on valuation, financing and regulatory approval. PayPal Takeover Offer Report
• Positive Sentiment: Tuition-payment integrations broaden PayPal’s transaction opportunities. PayPal and Venmo are now available through Illumia, Nelnet Campus Commerce and TouchNet at schools including Kansas State, Michigan State and Texas Tech. The initiative adds a recurring, high-value payment use case and could increase volume, although the near-term revenue contribution is unclear. PayPal and Venmo Tuition Integrations
• Positive Sentiment: PayPal is holding up better than some buy-now, pay-later rivals. Klarna and Affirm declined while PayPal remained higher, suggesting investors may be favoring the scale, diversification and established customer base of larger payment companies. BNPL Stock Rotation Report
• Neutral Sentiment: An insider sale offers a modest cautionary signal. Suzan Kereere sold 4,162 shares worth approximately $253,716 under a pre-arranged Rule 10b5-1 plan, while retaining 30,983 shares. The scheduled nature of the transaction limits its significance. PayPal Insider Sale Filing
• Negative Sentiment: Competition and valuation concerns remain risks. TikTok is reportedly developing peer-to-peer payments within direct messages, potentially challenging Venmo. Investor commentary also warned that PayPal and other fintech stocks may be priced for overly optimistic growth expectations. TikTok Peer-to-Peer Payments Report

Analyst Upgrades and Downgrades

Several research firms recently commented on PYPL. Truist Financial raised their price objective on shares of PayPal from $59.00 to $62.00 and gave the stock a "hold" rating in a report on Wednesday. Cantor Fitzgerald increased their target price on PayPal from $54.00 to $60.00 and gave the stock a "neutral" rating in a research report on Monday, August 3rd. BNP Paribas Exane raised their price target on PayPal from $43.50 to $52.00 and gave the stock a "neutral" rating in a report on Tuesday, July 21st. Royal Bank Of Canada lifted their price target on PayPal from $59.00 to $65.00 and gave the company an "outperform" rating in a research report on Wednesday, July 29th. Finally, Mizuho boosted their price objective on PayPal from $50.00 to $60.00 and gave the company a "neutral" rating in a research note on Wednesday, July 29th. Nine analysts have rated the stock with a Buy rating, thirty-four have given a Hold rating and four have issued a Sell rating to the company. According to MarketBeat.com, the company currently has a consensus rating of "Hold" and a consensus price target of $56.28.

PayPal Stock Up 1.7%

The company's 50 day simple moving average is $51.31 and its 200-day simple moving average is $47.35. The company has a debt-to-equity ratio of 0.55, a quick ratio of 1.29 and a current ratio of 1.29. The firm has a market capitalization of $53.30 billion, a PE ratio of 11.78, a PEG ratio of 1.47 and a beta of 1.30.

PayPal (NASDAQ:PYPL - Get Free Report) last released its quarterly earnings results on Tuesday, July 28th. The credit services provider reported $1.38 earnings per share for the quarter, topping the consensus estimate of $1.28 by $0.10. The firm had revenue of $8.68 billion for the quarter, compared to analysts' expectations of $8.47 billion. PayPal had a net margin of 14.36% and a return on equity of 24.39%. The business's quarterly revenue was up 4.8% on a year-over-year basis. During the same quarter in the prior year, the firm posted $1.40 earnings per share. On average, analysts forecast that PayPal Holdings, Inc. will post 5.38 EPS for the current fiscal year.

PayPal Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Friday, September 25th. Stockholders of record on Friday, September 4th will be given a dividend of $0.14 per share. This represents a $0.56 dividend on an annualized basis and a dividend yield of 0.9%. The ex-dividend date is Friday, September 4th. PayPal's dividend payout ratio (DPR) is 10.59%.

Insider Transactions at PayPal

In related news, insider Frank Keller sold 4,612 shares of the company's stock in a transaction that occurred on 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. This represents a 9.99% decrease in their ownership of the stock. The transaction was disclosed in a document filed 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 Suzan Kereere sold 4,162 shares of the firm's stock in a transaction that occurred on Tuesday, August 18th. The shares were sold at an average price of $60.96, for a total transaction of $253,715.52. Following the completion of the sale, the insider directly owned 30,983 shares in the company, valued at $1,888,723.68. This represents a 11.84% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders sold 14,774 shares of company stock valued at $738,249. 0.63% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. BlackRock Inc. purchased a new stake in PayPal during the second quarter valued at about $3,236,989,000. Bank of America Corp DE purchased a new position in shares of PayPal in the 2nd quarter worth about $975,563,000. Norges Bank purchased a new position in shares of PayPal in the 4th quarter worth about $949,758,000. Primecap Management Co. CA bought a new position in shares of PayPal during the 2nd quarter valued at about $422,092,000. Finally, Corient Private Wealth LP bought a new position in shares of PayPal during the 2nd quarter valued at about $20,758,000. 68.32% of the stock is currently owned by hedge funds and other institutional investors.

PayPal Company Profile

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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