PayPal (NASDAQ:PYPL) Trading Down 1.8% - Here's What Happened

Key Points

• PayPal shares fell 1.8% on Friday, closing near $45.37 after trading as low as $45.33, with volume below average.
• Analyst sentiment turned more cautious after Macquarie downgraded PayPal to Neutral and cut its target to $50, while Bank of America also trimmed its target to $53; the broader consensus remains Hold.
• Regulatory and growth concerns are weighing on the stock, including a U.K. FCA probe into PayPal’s wallet practices and investor focus on a softer Q2 outlook despite the company’s recent earnings beat.

PayPal Holdings, Inc. (NASDAQ:PYPL - Get Free Report) fell 1.8% during trading on Friday . The company traded as low as $45.33 and last traded at $45.37. 13,378,912 shares traded hands during mid-day trading, a decline of 36% from the average session volume of 20,989,688 shares. The stock had previously closed at $46.22.

Key Headlines Impacting PayPal

Here are the key news stories impacting PayPal this week:

• Negative Sentiment: Macquarie downgraded PayPal to Neutral from Outperform and cut its price target to $50, saying the company’s Q2 outlook looks soft and its cost-saving plan is heavily back-end loaded. Macquarie Downgrades PayPal as Cost-Saving Plan Looks Too Back-End Loaded
• Negative Sentiment: The U.K. Financial Conduct Authority launched a competition probe into PayPal’s digital wallet funding and usage practices, adding regulatory uncertainty in an important international market. FCA Probe Tests PayPal’s UK Wallet Economics And Growth Narrative
• Negative Sentiment: Bank of America also lowered its price target on PayPal to $53 from $55 while keeping a neutral stance, reinforcing the view that upside may be limited near term. BofA Securities Adjusts PayPal Price Target
• Neutral Sentiment: Needham reiterated a Hold rating, while other recent analyst notes were mixed, suggesting Wall Street is divided on PayPal’s next move. PayPal's (PYPL) "Hold" Rating Reiterated at Needham & Company LLC
• Neutral Sentiment: PayPal’s recent earnings beat showed solid quarterly results, but investors appear focused more on the company’s slower growth narrative and reset expectations than on the beat itself.

Analyst Upgrades and Downgrades

Several equities research analysts recently weighed in on PYPL shares. Loop Capital assumed coverage on shares of PayPal in a research report on Tuesday, March 31st. They set a "hold" rating and a $46.00 price objective for the company. Wolfe Research reissued a "sell" rating on shares of PayPal in a report on Monday, February 23rd. Weiss Ratings restated a "hold (c)" rating on shares of PayPal in a research report on Thursday, January 22nd. Wall Street Zen lowered shares of PayPal from a "buy" rating to a "hold" rating in a research report on Sunday, January 18th. Finally, Royal Bank Of Canada reissued an "outperform" rating and issued a $59.00 price objective on shares of PayPal in a research note on Wednesday. Eight analysts have rated the stock with a Buy rating, thirty-two have assigned a Hold rating and five have assigned a Sell rating to the company. According to MarketBeat, the stock presently has a consensus rating of "Hold" and an average target price of $56.42.

PayPal Stock Performance

The company has a debt-to-equity ratio of 0.47, a current ratio of 1.26 and a quick ratio of 1.29. The stock has a market cap of $40.02 billion, a P/E ratio of 8.51, a PEG ratio of 1.33 and a beta of 1.39. The stock has a 50-day simple moving average of $46.75 and a 200-day simple moving average of $53.99.

PayPal (NASDAQ:PYPL - Get Free Report) last posted its quarterly earnings results on Tuesday, May 5th. The credit services provider reported $1.34 earnings per share for the quarter, beating analysts' consensus estimates of $1.27 by $0.07. The company had revenue of $8.35 billion for the quarter, compared to the consensus estimate of $8.05 billion. PayPal had a net margin of 15.00% and a return on equity of 25.02%. The firm's quarterly revenue was up 7.2% compared to the same quarter last year. During the same period last year, the company posted $1.33 EPS. Research analysts forecast that PayPal Holdings, Inc. will post 5.32 earnings per share for the current year.

PayPal Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Thursday, June 25th. Shareholders of record on Thursday, June 4th will be given a $0.14 dividend. The ex-dividend date is Thursday, June 4th. This represents a $0.56 dividend on an annualized basis and a yield of 1.2%. PayPal's dividend payout ratio (DPR) is currently 10.51%.

Insider Transactions at PayPal

In other news, CAO Chris Natali sold 2,208 shares of the stock in a transaction on Tuesday, March 3rd. The stock was sold at an average price of $44.73, for a total value of $98,763.84. Following the completion of the transaction, the chief accounting officer directly owned 1,140 shares in the company, valued at approximately $50,992.20. This represents a 65.95% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, EVP Frank Keller sold 29,581 shares of the business's stock in a transaction on Tuesday, March 3rd. The stock was sold at an average price of $46.02, for a total value of $1,361,317.62. Following the sale, the executive vice president owned 51,567 shares in the company, valued at $2,373,113.34. This represents a 36.45% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders sold 96,199 shares of company stock worth $4,294,018. Corporate insiders own 0.63% of the company's stock.

Institutional Investors Weigh In On PayPal

Hedge funds have recently added to or reduced their stakes in the business. Maia Wealth LLC grew its stake in shares of PayPal by 2.5% in the third quarter. Maia Wealth LLC now owns 6,404 shares of the credit services provider's stock worth $424,000 after purchasing an additional 155 shares during the last quarter. Transatlantique Private Wealth LLC raised its position in PayPal by 2.9% during the 3rd quarter. Transatlantique Private Wealth LLC now owns 5,698 shares of the credit services provider's stock worth $382,000 after purchasing an additional 159 shares during the last quarter. Martin & Co. Inc. TN raised its position in PayPal by 0.3% during the 3rd quarter. Martin & Co. Inc. TN now owns 56,934 shares of the credit services provider's stock worth $3,818,000 after purchasing an additional 175 shares during the last quarter. Harrell Investment Partners LLC lifted its holdings in PayPal by 2.0% during the 3rd quarter. Harrell Investment Partners LLC now owns 9,185 shares of the credit services provider's stock worth $616,000 after buying an additional 184 shares during the period. Finally, RWA Wealth Partners LLC lifted its holdings in PayPal by 0.7% during the 3rd quarter. RWA Wealth Partners LLC now owns 25,043 shares of the credit services provider's stock worth $1,679,000 after buying an additional 184 shares during the period. 68.32% of the stock is currently owned by institutional investors and hedge funds.

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.

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