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
- Earnings Calendar and Analysis for This Week
- Analysts' Top S&P 500 Stocks to Buy Now
- Stock Picks That Billionaires Love
-
Stock Market Today: Have We Seen the Bottom for Stocks?Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
-
Is the GOP Secretly Planning to Raise Taxes on the Rich?Tax Reform As high-stakes tax reform talks resume on Capitol Hill, questions are swirling about what Republicans and President Trump will do.
-
Stock Market Today: Have We Seen the Bottom for Stocks?
Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
-
Social Security Is Taxable, But There Are WorkaroundsIf you're strategic about your retirement account withdrawals, you can potentially minimize the taxes you'll pay on your Social Security benefits.
-
Serious Medical Diagnosis? Four Financial Steps to TakeA serious medical diagnosis calls for updates of your financial, health care and estate plans as well as open conversations with those who'll fulfill your wishes.
-
What Wall Street's CEOs Are Saying About Trump's TariffsWe're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
-
To Stay on Track for Retirement, Consider Doing ThisWriting down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
-
How to Make Changing Interest Rates Work for Your RetirementHigher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
-
When to Sell Your StockKnowing when to sell a stock is a major decision investors must make. While there's no one correct answer, we look at some best practices here.
-
Within Five Years of Retirement? Five Things to Do NowIf you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
