Paypal
Overall, Paypal shares are down just over 50% YTD and are down by nearly 75% from it's all-time high in July of last year. The company has been hit by a number of headwinds including demand and growth being pulled forward during the pandemic, a slowdown in online spending, and higher rates leading to multiple compression for tech companies. The company is also slowly losing market share to upstarts like Square
Inside the Numbers
In Q3, Paypal reported $1.08 per share in earnings which was better than expectations of $0.96 per share in earnings. Revenue also slightly edged out estimates at $6.85 billion vs $6.82 billion. Overall, earnings were down by 2% and revenue was up 11% compared to last year.
The company's Q4 revenue forecast also disappointed at $7.4 billion vs expectations of $7.7 billion. However, the stock's swift recovery and surge higher could be an indication that this weakness is already discounted by the stock's decline.
The company did increase its EPS guidance for the full year by a modest amount as it sees increased monetization of its services and offerings and continued growth in transactions. It also forecasts a net addition of 8 million to 10 million new active users in the next year. However, it attributed the weak Q4 revenue forecast to expectations of an economic downturn that would affect online spending. It's also worth noting that most of the company's growth is coming from Venmo.
The company also announced that it's working with Apple
