PayPal Q3 Earnings Preview: Cautious Optimism Prevails

Online payment platform company, PayPal Holdings Inc PYPL is reporting its third-quarter earnings after market close on Wednesday.

California-based PayPal is one of the most recognized and widely used online payment systems globally. It provides a convenient and secure way for people and businesses to make payments and money transfers over the internet. PayPal has significantly impacted the way people and businesses conduct online financial transactions.

Q3 Analysts Focus: PayPal analysts will be closely watching operational performance and metrics of the business. Non-transaction operating expenditure, a key determinant of operational efficiency in the business, has been declining year-on-year. Its foray into crypto adds another layer of uncertainty.

Read Also: UK Regulator FCA Approves PayPal As Crypto Service Provider On Heels Of Suspension

Merchant penetration at PayPal is decent, however, merchant growth seems to be stalling, given the increased competition. Margins appear pressured. As competition intensifies, this stock garners a lot of attention with each earnings report.

The stock may appear attractive to investors at just 10.47 P/E – however it may be down for an adequate reason. Most analysts appear cautiously optimistic about PYPL stock.

Ratings & Consensus Estimates: For the third-quarter, Wall Street analysts are expecting PayPal to report $1.16 in EPS and $6.96 billion in revenue. For the fiscal year ending December 2023, the company is expected to report $4.95 in EPS and $29.72 billion in revenue.

Recent reports from 49 analysts over the last 90 days rate the stock a Buy, with an average consensus price target of $82.49.

Over the past month, we've seen many sell-side analysts provide their ratings and price target for PayPal stock. Andrew Bauch of Wells Fargo initiated coverage of PYPL stock with an Equal-Weight rating and a price target of $55, while Timothy Chiodo of UBS has a Neutral rating and a $63 price target on the stock.

Price Action: Paypal is down 13% over the past month and was down 1.13% at $51.22 at the time of publication Wednesday.

Read Next: SoFi Stock Is Headed Higher, Says Goldman Sachs: Q3 Earnings First Take

Photo: Shutterstock