![]() ![]() ![]() At the same time, Jessurun hasn't changed his Buy rating and his $90 price target on PYPL stock. Jessurun, the BTIG analyst I mentioned earlier, acknowledged that PayPal's margins fell short of Wall Street's expectations. PayPal has had to deal with this issue just like many other businesses, but somehow, the market isn't willing to forgive PayPal for its declining margins. ![]() Profit margins have been a major concern of businesses generally, especially during the second quarter, when inflation was still elevated and reduced companies' profits. Here's the billion-dollar question: If PayPal delivered numerous positive data points in Q2, why did PYPL stock drop on high volume? The answer, for the most part, has to do with PayPal's declining margins. With all of those positive data points in mind, we now have to figure out why traders would choose to sell their PayPal shares. In addition, the company's total payment volume of $376.5 billion exceeded Wall Street's consensus estimate of $368.87 billion.Īs far as operating highlights go, PayPal increased its payment transactions by 10% to 6.1 billion and boosted its total payment volume (TPV) by 11% to the aforementioned $376.5 billion. Furthermore, PayPal generated revenue of $7.3 billion, up 7% year-over-year and topping analysts' call for $7.27 billion. Does this mean that PayPal posted a slew of disappointing data points? Not at all - in actuality, the company beat analysts' earnings expectations and provided plenty of fodder for the bulls.įor one thing, PayPal reported non-GAAP EPS of $1.16, while analysts had called for $1.15 per share. PayPal stock fell by over 12% today, the day after the company released its second-quarter 2023 earnings results. PayPal Beats the Street, but the Stock Still Tanks Contrarian traders should consider whether the crowd is overreacting and whether now is the time to buy what others are selling. Now, all of a sudden, investors are overwhelmingly bearish about PayPal stock (though analysts might not be). fee is 2.9% + $0.30 per transaction, not 4.4% + $0.30 per transaction as stated earlier.However, the tide of sentiment can turn quickly in the financial markets. Meanwhile, Square Cash, with its Cashtags feature, is only available inside the U.S.īy launching quickly to an international audience, PayPal is actually staying ahead of its competition - especially if Square ever pushes its Cash app to a global audience. PayPal has 169 million customers in 190 countries. Starting today, users in 18 countries will have access to. The reason PayPal doesn’t need to fuss over keeping prices low is because of the scale of its business. In contrast, businesses that set up a site will pay the same fee they pay through PayPal ( 2.9% + $0.30 per transaction in the U.S.). Square offers its Cashtags service to businesses for an incentivizing 1.5 percent transaction fee (less than its typical processing fee of 2.5 percent for Square Register transactions). But this isn’t just a matter of keeping up with the Joneses.įor instance, while PayPal is launching a product that competes with Cashtags functionality, it is not competing on price. The company was also one of many to launch a copycat of Square’s signature credit card reader for mobile phones and tablets. This isn’t the first time PayPal has taken a page out of Square’ playbook. If a person sending a payment doesn’t have a PayPal account, the site will redirect them to a page where they can quickly be onboarded to PayPal.Ĭashtags, on the other hand, enables those without a Square account to pay friends and businesses by inputting their debit card information. The main difference between and is that the latter requires users to have a PayPal account, regardless of whether they’re sending or receiving money. The feature is essentially a hashtag for getting cash sent directly to you through Square’s site. This new feature smacks of a Square product launched earlier this year called Cashtags. The idea behind is that people will be more likely to pay you back if, when you’re reminding them to pay up, you include a blue link to a place where they can do just that. are owed a massive $51 billion in small peer-to-peer debt. He says PayPal conducted a study revealing that people in the U.S. “About 50 percent of Americans say they have small debt from friends and family that is owed to them,” says PayPal senior director of global consumer product management, Meron Colbeci. The product concept is tied to a study that says people miss out on a lot of cash when their friends forget to pay them back. ![]()
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