雅虎香港財經 Why Is Paypal (PYPL) Down 7.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Paypal (PYPL). Shares have lost about 7.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Paypal due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
PayPal Q1 Earnings Beat Estimates, Revenues Up Y/Y
PayPal Holdings reported non-GAAP earnings of $1.08 per share for first-quarter 2024, which improved 27% on a year-over-year basis.
Per the company’s old methodology, which excludes the impacts of stock-based compensation expenses and related employer payroll taxes, adjusted earnings were $1.40 per share, which surpassed the Zacks Consensus Estimate by 16.7%
Net revenues of $7.7 billion exhibited year-over-year growth of 10% on an FX-neutral basis and 9% on a reported basis. The figure surpassed the Zacks Consensus Estimate of $7.5 billion.
Growing transaction revenues drove year-over-year top-line growth in the reported quarter. Also, accelerating U.S. and international revenues contributed well.
Top Line in Detail
By Type: Transaction revenues amounted to $7.03 billion (91% of net revenues), up 11% from the year-ago quarter. Other value-added services generated revenues of $665 million (accounting for 9% of net revenues), down 2% year over year.
By Geography: Revenues from the United States totaled $4.5 billion (58% of net revenues), up 8% on a year-over-year basis. International revenues were $3.2 billion (42% of net revenues), up 12% from the prior-year quarter.
Key Metrics to Consider
PayPal witnessed a year-over-year decline of 1% in total active accounts, which came in at 427 million in the quarter under review. The figure was in line with the Zacks Consensus Estimate.
The total number of payment transactions was 6.5 billion, up 11% on a year-over-year basis. The figure beat the consensus mark of 6.49 billion.
PYPL’s payment transactions per active account were 60 million, which improved 13% from the year-ago quarter.
Total payment volume amounted to $403.9 billion for the reported quarter, indicating year-over-year growth of 14% on a spot-rate basis, as well as on a currency-neutral basis. The reported figure topped the Zacks Consensus Estimate of $394.05 billion.
Operating Details
PayPal’s operating expenses were $6.53 billion in the first quarter, up 8.1% from the prior-year quarter. As a percentage of net revenues, the figure contracted 100 basis points (bps) on a year-over-year basis.
The non-GAAP operating margin was 15.2%, expanding 100 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2024, cash equivalents and investments were $14.3 billion, up from $14.1 billion as of Dec 31, 2023.
PayPal had a long-term debt balance of $9.68 billion as of Mar 31, 2024, compared with $9.67 billion as of Dec 31, 2023.
PYPL generated $1.9 billion in cash from operations in the reported quarter compared with $2.6 billion in the previous quarter. The free cash flow was $1.8 billion in the first quarter, down from $2.5 billion in the prior quarter.
The company returned $1.5 billion to its shareholders by repurchasing 25 million shares.
Guidance
For second-quarter 2024, PayPal expects revenues to grow 6.5% on a spot rate basis and 7% on a currency-neutral basis from the year-ago quarter.
Non-GAAP earnings per share are expected to rise in the low-double-digit percentage on a year-over-year basis.
For 2024, PayPal anticipates non-GAAP earnings per share to rise in the mid to high-single-digit percentage.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Paypal has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Paypal has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Paypal is part of the Zacks Internet - Software industry. Over the past month, F5 Networks (FFIV), a stock from the same industry, has gained 1%. The company reported its results for the quarter ended March 2024 more than a month ago.
F5 reported revenues of $681.35 million in the last reported quarter, representing a year-over-year change of -3.1%. EPS of $2.91 for the same period compares with $2.53 a year ago.
F5 is expected to post earnings of $2.99 per share for the current quarter, representing a year-over-year change of -6.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.9%.
F5 has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
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