PayPal Q3 Is 'All About' New CEO's Vision: 5 Analysts Explore Earnings, Prospects

Shares of PayPal Holdings Inc PYPL rose in early trading on Thursday, after the company reported its third-quarter (Q3) results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

• Piper Sandler analyst Kevin Barker reiterated a Neutral rating, while reducing the price target from $67 to $66.
• Wedbush analyst Moshe Katri reaffirmed an Outperform rating and price target of $85.
• Stephens analyst Charles Nabhan maintained an Equal-Weight rating and price target of $65.
• Mizuho Securities analyst Dan Dolev reiterated a Buy rating and price target of $92.
• William Blair analyst Robert Napoli reaffirmed an Outperform rating on the stock.

Check out other analyst stock ratings.

Piper Sandler: “This quarter is all about the initial unveiling of Alex Chriss' vision for PayPal and the introduction of a new CFO, Jamie Miller,” Barker said in a note.

Chriss "cited operating expenses as an issue several times and a need to reduce the cost base in order focus on better growth opportunities."

He also cited a need to generate "greater small business adoption of PayPal Complete Payments, in the U.S. and globally,” the analyst added.

Wedbush: PayPal reported stronger-than-expected results for the third quarter, while resetting the fourth-quarter and full-year guidance, mostly to reflect FX headwinds, Katri said.

Apart from naming the next CFO of PayPal, the new CEO highlighted the need to improve “execution/velocity, partnership efficiency, product differentiation and monetization initiatives,” the analyst stated.

Among the new initiatives, the company plans to launch “a new consumer experience with Checkout in the middle” and, for large merchants, the focus will be on share gains with BrainTree, “which currently dominates 10% of global eCommerce share,” he added.

Stephens: “PYPL reported better-than-expected non-GAAP EPS of $1.30 (vs. est. of $1.23), due to a slightly higher-than-expected margin and lower effective tax rate,” Nabhan said in a note. “Revenue growth (+8% spot/+9% FXN) was roughly in-line, and driven by transaction/OVAS growth of 7%/25%, respectively,” he added.

Management raised the full-year earnings guidance from $4.95 per share to $4.98 per share, “largely reflecting the 1Q beat and a reduction in the '23 margin expansion guide,” the analyst mentioned.

Mizuho Securities: “Net transaction margin dollar declines were less than feared,” Dolev said. “Branded Checkout TPV accelerated to +6% FXN vs. +5% in 2Q."

Both U.S. and International TPV growth accelerated in the quarter, while Braintree continued to gain share and unbranded growth accelerated by around 400 basis points, the analyst noted.

William Blair: The new CEO outlined “high-level strategic priorities for the business that include leveraging its data assets and global platform, while narrowing its focus toward profitable growth,” Napoli said.

“It is clear Chriss believes PayPal is a platform/growth company,” the analyst wrote. “PayPal appointed Jamie Miller (previously with Cargill and EY) as CFO — this marks the first permanent CFO hire since April 2022 — and the company plans to simplify core KPIs and metrics provided to the Street,” he added.

PYPL Price Action: Shares of PayPal had risen by 3.85% to $53.65 at the time of publication Thursday.