Paypal stock is down because the company missed its earnings target for the second quarter in a row. The online payment processor reported earnings of 35 cents per share, missing the analyst estimate of 37 cents. Revenue was also light, coming in at $2.95 billion versus the $3.01 billion that was expected.
The stock market is a volatile place, and even the most stable companies can see their share prices dip from time to time. So, why is PayPal stock down?
There could be any number of reasons.
Maybe investors are worried about the company’s future growth prospects. Or maybe there’s been some negative news about PayPal that has spooked investors. Whatever the reason, it’s important to remember that stock prices can go up and down in the short-term.
In the long-term, however, PayPal has proven to be a reliable investment. So, if you’re thinking about buying shares in the company, don’t let a temporary dip in the stock price deter you.
Paypal Stock Forecast
Paypal Holdings, Inc. (NASDAQ: PYPL) stock has been on a tear in 2020, up over 60% since the start of the year. The payments giant has benefitted from the shift to digital payments during the COVID-19 pandemic, as more consumers and businesses move away from cash and cheques.
Looking ahead, Paypal’s strong position in the digital payments space should continue to drive growth.
The company is well-positioned to benefit from continued growth in e-commerce and mobile payments. In addition, Paypal is expanding its reach beyond online payments with initiatives like its new partnership with Walmart (NYSE: WMT). With shares trading at around $190, Paypal’s stock is not cheap, but I believe there is still upside potential for the company.
I have a price target of $220 for Paypal stock by 2022.
Why Did Paypal Stock Drop So Much?
PayPal’s stock price has been on a roller coaster ride over the past year. After reaching an all-time high of $133 in July 2018, the stock plummeted to a low of $76 in December. Since then, it has recovered somewhat and is currently trading at around $96.
So what caused PayPal’s stock to drop so much? There are a few factors that likely contributed to the sell-off. First, PayPal had been one of the hottest stocks on Wall Street prior to its decline.
This meant that there were a lot of investors who were holding onto the stock for dear life, waiting for it to rebound. But when it didn’t, they panicked and sold their shares, causing the price to plummet even further. Second, there was growing concerns about PayPal’s business model.
The company relies heavily on eBay for its growth and revenue. However, eBay has been struggling lately, as more shoppers are moving away from the platform in favor of Amazon and other e-commerce sites. This worried investors who saw PayPal as being too dependent on eBay and worried that its growth would stall if eBay continued to struggle.
Finally, there were also concerns about how well PayPal was managing its recent acquisitions. The company had made a number of large acquisitions over the past few years in an effort to expand its reach beyond eBay. However, some investors questioned whether these acquisitions were actually helping or hurting PayPal’s bottom line.
So those are some of the main reasons why PayPal’s stock dropped so much over the past year.
Is It Good to Buy Paypal Stock Now?
It’s tough to say whether or not PayPal stock is a good buy right now. The company has been doing well lately, with strong growth in both revenue and earnings. However, the stock is already fairly expensive, trading at around 35 times earnings.
That means that investors are already expecting a lot of growth from PayPal going forward. If you’re bullish on PayPal’s prospects, then buying the stock at its current price may not be a bad idea. The company still has a lot of room for growth, particularly in its international business.
And, with more and more people moving away from cash and towards digital payments, PayPal should continue to see strong demand for its services. On the other hand, if you’re worried about the stock being overvalued, then you may want to wait for a pullback before buying shares. After all, even the best companies can have down years and PayPal is no exception.
So, if the market sell-off continues or worsens, PayPal stock could drop along with it.
Will Paypal Stock Ever Recover?
It’s been a tough year for PayPal (NASDAQ: PYPL) shareholders. The stock is down more than 20% since peaking in early 2018, and it has underperformed the broader market by a wide margin. PayPal’s recent woes can be traced back to two major issues: the company’s inability to capitalize on the growth of cryptocurrency, and its ongoing problems with fraudulent activity.
The good news is that PayPal appears to be taking steps to address both of these issues. Let’s take a closer look at what the company is doing to try to get its stock back on track. Cryptocurrency: Late to the Party
One of the biggest reasons for PayPal’s underperformance this year has been its late entry into the cryptocurrency market. The company announced in late 2017 that it would allow customers to buy, sell, and hold Bitcoin (BTC) and other cryptocurrencies through its platform. However, when Bitcoin prices began soaring in early 2018, PayPal was forced to pull back from its plans due to concerns about regulatory compliance.
This left many investors wondering why PayPal hadn’t moved faster to embrace cryptocurrency. After all, rival payment companies like Square (NYSE: SQ) and Robinhood had already launched crypto trading platforms, and they were reaping the rewards as Bitcoin prices soared.
Delete Paypal? Paypal's HUGE mistake! Paypal Stock (PYPL) analysis!
Paypal’s stock is down because the company missed its earnings targets for the third quarter of 2019. Wall Street was expecting Paypal to report earnings of $0.69 per share, but the company only reported earnings of $0.67 per share. This miss caused Paypal’s stock to drop by about 3% in after-hours trading.