PayPal Turns in Strong Q2 Earnings, Hikes Stock Buybacks
PayPal stock is trading higher Tuesday after the company's beat-and-raise quarter and upwardly revised share repurchase program. Here's what you need to know.
![paypal logo on smartphone with blue background](https://cdn.mos.cms.futurecdn.net/PEZgpMBSTcs4osfq8bNmQc-415-80.jpg)
PayPal Holdings (PYPL) stock jumped out of the gate Tuesday after the payments giant beat top- and bottom-line expectations for its second quarter, raised its full-year outlook and increased its share repurchase forecast.
In the three months ended June 30, PayPal's revenue increased 8.2% year-over-year to $7.9 billion, driven in part by a nearly 11% rise in total payment volume to $416.8 billion. The company also said earnings per share (EPS) were up 36.8% from the year-ago period to $1.19.
"PayPal delivered a strong second quarter and first half, and I'm confident we're on the right track," said PayPal CEO Alex Chriss in a statement. "We delivered our best transaction margin dollar growth since 2021, and we are making steady progress on our strategic transformation, while investing in innovation and operating more efficiently."
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results beat analysts' expectations. Wall Street was anticipating revenue of $7.8 billion and earnings of 99 cents per share, according to Yahoo Finance.
"Given the strength of our business, we are raising our 2024 guidance and increasing share repurchases," Chriss said.
PayPal now anticipates EPS growth in the low to mid-teens percentage, up from its previous forecast of mid- to high-single digit growth. It also now expects to buy back roughly $6 billion of its own shares, up from its prior forecast of at least $5 billion. Stock buybacks can boost value for shareholders.
PayPal also provided its third-quarter guidance, projecting mid-single-digit revenue growth and high single-digit earnings per share growth.
"We are operating from a position of strength, delivering for our customers, and focusing on long-term profitable growth," Chriss added.
Is PayPal stock a buy, sell or hold?
PayPal is lagging the broader market on the price charts this year, up 5% vs the S&P 500's more than 14% return. Yet Wall Street remains bullish on the financial stock.
According to S&P Global Market Intelligence, the average analyst target price for PYPL stock is $76.92, representing an upside of roughly 20% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Susquehanna Financial Group recently upgraded PayPal to Positive (equivalent to a Buy) from Neutral (equivalent to a Hold).
"Our conversations with the company, which when coupled with customer and industry observations, seem more constructive," said Susquehanna analyst James Friedman in a July 2 note. "Profitable growth is now a top priority for PayPal, enshrined in a recent update to the company's 2024 Annual Incentive Plan."
Friedman has a $71 price target on PayPal, which is 11% above where the stock is currently trading.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
5 Stocks to Buy for a Trump Presidency
The race for the White House is heating up and these five stocks are set to benefit if Donald Trump claims victory.
By Will Ashworth Published
-
6 Target-Date Funds to Buy For Your Retirement
These six target-date funds are good set-it-and-forget-it options that are a staple of retirement plans.
By Nellie S. Huang Published
-
5 Stocks to Buy for a Trump Presidency
The race for the White House is heating up and these five stocks are set to benefit if Donald Trump claims victory.
By Will Ashworth Published
-
Six Target-Date Funds to Buy For Your Retirement
These six target-date funds are good set-it-and-forget-it options that are a staple of retirement plans.
By Nellie S. Huang Published
-
How to Deal With Inflation: Advice From a Financial Adviser
Higher prices are hitting everyone, but if you're especially hurting, here are some ways that could help you to cope.
By Kelsey M. Simasko, Esq. Published
-
Stock Market Today: Dow Dives 410 Points After August Jobs Miss
A big slump in tech stocks thanks to Broadcom's post-earnings slide put pressure on the main indexes too.
By Karee Venema Published
-
Mixed Jobs Report Keeps Fed on Track for Rate Cuts: What the Experts Are Saying
Jobs Report The Fed will cut rates this month. The only question is by how much.
By Dan Burrows Published
-
Apple Stock's a Buy Ahead of Apple Event 2024
Apple stock is on Wall Street's radar ahead of the tech giant's annual September product event, which begins on Monday. Here's what analysts are saying and what you can expect to see.
By Joey Solitro Published
-
UiPath Stock's Price Struggles Continue After Earnings: What to Know
UiPath stock has been a market laggard this year and losses are accelerating even after the company's beat-and-raise quarter.
By Joey Solitro Published
-
Why Broadcom Stock Is Still a Buy After Earnings
Broadcom stock is sinking Friday after the chipmaker's outlook fell short, but Wall Street remains bullish. Here's what they're saying.
By Joey Solitro Published