PayPal Holdings (PYPL) stock jumped out of the gate Tuesday after the payments giant beat top- and bottom-line expectations for its second quarter, raised its full-year outlook and increased its share repurchase forecast.
In the three months ended June 30, PayPal's revenue increased 8.2% year-over-year to $7.9 billion, driven in part by a nearly 11% rise in total payment volume to $416.8 billion. The company also said earnings per share (EPS) were up 36.8% from the year-ago period to $1.19.
"PayPal delivered a strong second quarter and first half, and I'm confident we're on the right track," said PayPal CEO Alex Chriss in a statement. "We delivered our best transaction margin dollar growth since 2021, and we are making steady progress on our strategic transformation, while investing in innovation and operating more efficiently."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results beat analysts' expectations. Wall Street was anticipating revenue of $7.8 billion and earnings of 99 cents per share, according to Yahoo Finance.
"Given the strength of our business, we are raising our 2024 guidance and increasing share repurchases," Chriss said.
PayPal now anticipates EPS growth in the low to mid-teens percentage, up from its previous forecast of mid- to high-single digit growth. It also now expects to buy back roughly $6 billion of its own shares, up from its prior forecast of at least $5 billion. Stock buybacks can boost value for shareholders.
PayPal also provided its third-quarter guidance, projecting mid-single-digit revenue growth and high single-digit earnings per share growth.
"We are operating from a position of strength, delivering for our customers, and focusing on long-term profitable growth," Chriss added.
Is PayPal stock a buy, sell or hold?
PayPal is lagging the broader market on the price charts this year, up 5% vs the S&P 500's more than 14% return. Yet Wall Street remains bullish on the financial stock.
According to S&P Global Market Intelligence, the average analyst target price for PYPL stock is $76.92, representing an upside of roughly 20% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Susquehanna Financial Group recently upgraded PayPal to Positive (equivalent to a Buy) from Neutral (equivalent to a Hold).
"Our conversations with the company, which when coupled with customer and industry observations, seem more constructive," said Susquehanna analyst James Friedman in a July 2 note. "Profitable growth is now a top priority for PayPal, enshrined in a recent update to the company's 2024 Annual Incentive Plan."
Friedman has a $71 price target on PayPal, which is 11% above where the stock is currently trading.
Related Content
- Earnings Calendar and Analysis for This Week
- Analysts' Top S&P 500 Stocks to Buy Now
- Stock Picks That Billionaires Love
-
Choose a Beneficiary for Your Estate Plan: It's Not 'Duck, Duck, Goose'Choosing a beneficiary for your 401(k), insurance policy or similar assets is crucial for estate planning. Here is how to do it, and six pitfalls to avoid.
-
T-Mobile's Free iPhone 17 Deal: A Smart Switch or a Hidden Catch?Receive a free iPhone 17 when you switch to T-Mobile. We'll explain whether the deal is worth it.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client ReviewsFinancial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop InvestmentsTruck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
How Digital Platforms Are Changing the Way You Invest in GoldInvesting in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams NowBeyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on RetirementWhile some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.
