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."
Sign up for Kiplinger’s Free E-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
-
Stock Market Today: Dow Rises 854 Points From Its Intraday LowIf there's one thing markets hate, it's uncertainty. But uncertainty is all they're getting these days.
-
Are You a Retirement Millionaire Too Scared To Spend?If you are too scared to spend money in retirement, you may be saddled with regret. Here are three ways to safely enjoy your sizable retirement nest egg.
-
Stock Market Today: Dow Rises 854 Points From Its Intraday LowIf there's one thing markets hate, it's uncertainty. But uncertainty is all they're getting these days.
-
Seven Questions to Ask When Evaluating Personal Loan OptionsTaking out a personal loan too hastily could lock you into unfavorable terms with an untrustworthy lender. Ask these questions before signing anything.
-
How Much Does Being Rich Matter in Retirement?After a certain point, having more money in retirement won't make you any happier, new research shows. Instead, physical health, a sense of purpose, and a minimal amount of non-mortgage debt are more relevant.
-
The Three Biggest Fears Keeping Retirees Up at NightHere are the steps you can take to put those fears to rest and retire with confidence so you can relax and enjoy the life you've planned.
-
What Can a Donor-Advised Fund Do for You? (A Lot)DAFs and private foundations go about helping charities (and those who donate) in different ways. Each comes with its own benefits and restrictions to navigate.
-
Estate Planning When You Have International AssetsEstate planning gets tricky when you have assets and/or beneficiaries outside the U.S. To avoid costly inheritance mistakes, it pays to understand the basics.
-
Microsoft Stock: Innovation Spurs Its 100,000% ReturnMicrosoft's ability to recognize the "next big thing" has allowed sales – and its share price – to grow exponentially over the years.
-
Three Essential Estate Planning Steps to Protect Your Nest EggAfter dedicating years to building your wealth and securing your future, make sure your assets are protected and your loved ones are provided for in the future.
