Paypal
However, some are interpreting this price action as a bullish development and potentially an indication that the stock has bottomed out in terms of sentiment and positioning. Since Paypal's all-time high in July 2021 at just above $310, the stock is down 71%. It will be interesting to see at which level, value investors start to get interested in the stock as it does have a forward P/E of 17.9.
Inside the Numbers
In Q1, Paypal reported $0.88 in earnings per share, a 28% drop from last year. Revenues were 7% higher and reached $6.5 billion. This was basically in line with estimates of $0.88 in EPS and $6.4 billion in revenue. Total payment volume increased by 13% to reach $323 billion which was slightly above estimates.
The big headline was the company reducing guidance. It now expects revenue growth between 11% and 13% in 2022 vs a range of 15% to 17%, previously. It sees continued pressure due to supply-chain issues, lower e-commerce spending, and inflation. Of course, bulls would argue that these issues are already priced into the stock.
One of the challenges is the sharp deceleration in customer growth as the company only added 2.5 million customers in the quarter for a total of 429 million. Investors who believe the current slowdown is more of a reflection of pulling-forward user growth rather than a secular shift in the company's business could consider this an opportunity.
Some other challenges are a disappointment in terms of Venmo, as Square
