PayPal (NASDAQ:PYPL) Stock Jumps 3.4% - Should You Buy?

Key Points

• PayPal shares rose 3.4% as fintech stocks rallied after Block beat earnings expectations and raised its outlook; the move was not tied to new PayPal results.
• PayPal’s latest quarter delivered EPS of $1.45, above the $1.31 consensus, while revenue of $8.58 billion fell short of estimates and grew 2% year over year.
• Freedom Broker downgraded PayPal to Hold, citing stalled growth in branded checkout. Analysts overall rate the stock Hold, with an average price target of $55.94.

PayPal Holdings, Inc. (NASDAQ:PYPL - Get Free Report) shares shot up 3.4% during mid-day trading on Wednesday. The company traded as high as $60.87 and last traded at $60.20. Approximately 14,049,899 shares were traded during trading, a decline of 18% from the average session volume of 17,081,691 shares. The stock had previously closed at $58.21.

Key Headlines Impacting PayPal

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: PayPal advanced as fintech shares rallied after Block reported a quarterly earnings beat and raised its outlook, lifting sentiment across the group. The move appears sector-driven rather than tied to new PayPal results. Block Surges 16% on Earnings Beat and Raised Outlook; SoFi and PayPal Advance 4%
• Positive Sentiment: A payout integration with LianLian Global expands access to PayPal and Venmo wallets for creators, marketplaces, and contractors across 96 markets, potentially supporting cross-border payment activity. How Investors Are Reacting To PayPal (PYPL) LianLian Payout Partnership
• Neutral Sentiment: Payments platform Justt introduced PayPal Alerts for merchants, offering pre-chargeback warnings. The announcement may help merchants manage disputes, but the report does not indicate a direct financial impact for PayPal. Justt Launches 'Flows,' Its New Chargeback Automation Engine
• Negative Sentiment: Freedom Broker downgraded PayPal from Buy to Hold and lowered its price target from $72 to $63, saying branded checkout has not reaccelerated. This highlights concern about growth in a key business. Freedom Broker cuts PayPal to Hold as branded checkout stalls

Analyst Upgrades and Downgrades

A number of brokerages have weighed in on PYPL. Deutsche Bank Aktiengesellschaft reaffirmed a "hold" rating and set a $55.00 price target on shares of PayPal in a research report on Friday, September 25th. Argus set a $70.00 price objective on shares of PayPal in a research report on Wednesday, July 29th. BNP Paribas Exane raised their target price on shares of PayPal from $43.50 to $52.00 and gave the company a "neutral" rating in a research note on Tuesday, July 21st. Telsey Advisory Group lowered shares of PayPal to a "market perform" rating in a report on Friday, July 24th. Finally, The Goldman Sachs Group set a $50.00 price target on shares of PayPal in a research report on Tuesday, July 28th. Eight research analysts have rated the stock with a Buy rating, thirty-one have given a Hold rating and six have issued a Sell rating to the company's stock. According to data from MarketBeat, the company currently has an average rating of "Hold" and an average price target of $55.94.

PayPal Stock Performance

The company has a quick ratio of 1.26, a current ratio of 1.26 and a debt-to-equity ratio of 0.56. The company has a 50 day moving average of $55.24 and a 200 day moving average of $50.05. The firm has a market cap of $50.01 billion, a price-to-earnings ratio of 11.49, a PEG ratio of 1.24 and a beta of 1.33.

PayPal (NASDAQ:PYPL - Get Free Report) last issued its quarterly earnings data on Tuesday, October 27th. The credit services provider reported $1.45 earnings per share for the quarter, beating analysts' consensus estimates of $1.31 by $0.14. PayPal had a return on equity of 24.39% and a net margin of 13.78%. The firm had revenue of $8.58 billion during the quarter, compared to analyst estimates of $8.71 billion. During the same quarter last year, the firm earned $1.34 EPS. PayPal's quarterly revenue was up 2.0% on a year-over-year basis. As a group, equities research analysts expect that PayPal Holdings, Inc. will post 5.58 EPS for the current fiscal year.

PayPal Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Thursday, December 24th. Shareholders of record on Friday, December 4th will be paid a dividend of $0.14 per share. The ex-dividend date is Friday, December 4th. This represents a $0.56 annualized dividend and a yield of 0.9%. PayPal's payout ratio is presently 10.69%.

Insiders Place Their Bets

In other PayPal news, insider Frank Keller sold 732 shares of PayPal stock in a transaction that occurred on Wednesday, October 28th. The stock was sold at an average price of $55.37, for a total value of $40,530.84. Following the completion of the transaction, the insider directly owned 41,567 shares in the company, valued at $2,301,564.79. The trade was a 1.73% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Chris Natali sold 552 shares of the company's stock in a transaction that occurred on Thursday, September 3rd. The shares were sold at an average price of $54.80, for a total value of $30,249.60. Following the transaction, the chief accounting officer directly owned 2,400 shares of the company's stock, valued at $131,520. This trade represents a 18.70% 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 three months, insiders have sold 13,437 shares of company stock valued at $768,417. Company 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 stock. Allspring Global Investments Holdings LLC grew its holdings in PayPal by 4.0% in the third quarter. Allspring Global Investments Holdings LLC now owns 42,741 shares of the credit services provider's stock worth $2,268,000 after purchasing an additional 1,654 shares during the period. International Assets Investment Management LLC increased its stake in PayPal by 47.1% in the third quarter. International Assets Investment Management LLC now owns 76,000 shares of the credit services provider's stock valued at $3,992,000 after purchasing an additional 24,332 shares in the last quarter. Covestor Ltd raised its holdings in shares of PayPal by 35.8% during the third quarter. Covestor Ltd now owns 3,949 shares of the credit services provider's stock valued at $207,000 after purchasing an additional 1,040 shares during the period. Rakuten Investment Management Inc. raised its holdings in shares of PayPal by 7.4% during the third quarter. Rakuten Investment Management Inc. now owns 226,620 shares of the credit services provider's stock valued at $12,213,000 after purchasing an additional 15,668 shares during the period. Finally, First Nebraska Trust Co acquired a new position in shares of PayPal during the third quarter valued at about $1,690,000. 68.32% of the stock is currently owned by institutional investors.

PayPal Company Profile

PayPal Holdings, Inc operates a global digital payments platform that enables consumers and businesses to send, receive, and manage money online and through mobile devices. Its services support online checkout, peer-to-peer payments, money transfers, payment processing, invoicing, and other commerce-related transactions.

The company's portfolio includes the PayPal and Venmo brands, Braintree's payment processing technology, and Xoom's international money transfer service. PayPal also offers merchant tools, digital wallets, payment solutions, and consumer financing products through its platform and related services.

PayPal traces its origins to 1998 and became an independent publicly traded company after separating from eBay in 2015.

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