PayPal Holdings Inc
PayPal Holdings, Inc. (NASDAQ: PYPL) is a technology platform that enables digital payments and simplifies commerce experiences on behalf of merchants and consumers worldwide. The Company's payment solutions enable its customers to connect, transact, and send and receive payments, whether they are online or in person.
Recent Financial and Business Updates:
- Financial Highlights:
- Net revenues demonstrated growth of 7% and 8% when adjusted for currency fluctuations.
- Net revenues reached USD 7.3 billion, showing a 7% rise and an 8% increase when accounting for currency adjustments.
- GAAP operating income amounted to USD 1.1 billion, reflecting a 48% expansion. Meanwhile, non-GAAP operating income stood at USD 1.6 billion, growing by 20%.
- The GAAP operating margin expanded by 432 basis points, reaching 15.5%, while the non-GAAP operating margin expanded by 228 basis points, reaching 21.4%.
- GAAP EPS reached USD 0.92, a notable contrast to the (USD 0.29) reported in Q2'22. In parallel, non-GAAP EPS reached USD 1.16, a marked increase from the USD 0.93 recorded in Q2'22.
- Notably, the GAAP EPS includes a positive impact of approximately USD 0.09 attributed to PayPal's strategic investment portfolio, a significant improvement compared to the negative impact of approximately USD 0.45 experienced in Q2'22.
- Operating Highlights:
- Strong growth in volume and transactions compared to the previous year:
- Total Payment Volume (TPV) totaled USD 376.5 billion, displaying an 11% increase both in terms of spot and currency-neutral growth.
- A total of 6.1 billion payment transactions were conducted, indicating a 10% upswing.
- Each active account conducted an average of 54.7 payment transactions over the past twelve months, a growth of 12%.
- The count of total active accounts stood at 431 million, showing growth from the 429 million reported in Q2'22.
- Balance Sheet and Liquidity:
- A robust balance sheet and ongoing commitment to capital return:
- As of June 30, 2023, the combination of cash, cash equivalents, and investments summed up to USD 14.4 billon.
- Debt amounted to USD 10.5 billion as of the same date.
- During Q2'23, cash flow from operations was (USD 0.2) billion, with free cash flow also at (USD 0.4) billion.
- Both cash flow from operations and free cash flow includes a negative impact of USD 1.2 billion stemming from European buy now, pay later loans originated as HFS, with the expectation of being sold in H2'23.
- In Q2'23, a total of around 22 million shares of common stock were repurchased, marking a return of USD 1.5 billion to stockholders.
- Over the trailing twelve months, approximately 63 million shares of common stock were repurchased, amounting to a return of USD 4.9 billion to stockholders.
Technical Observation (on the daily chart)
The price of PYPL stock has shown a consistent downward trend since making its 52-week high on September 15, 2022, with a correction of approximately 40.60%. The RSI (14 period) momentum indicator is in an uptrend with currently at a value of 33.68, with expectations of some consolidation. Moreover, the price is currently positioned below both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance levels.
As per the above-mentioned price action, key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to PayPal Holdings, Inc. (NASDAQ: PYPL) at the current market price of USD 59.12 as of August 21, 2023, at 09:20 am PDT.
Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
How to Read the Charts?
The Yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.
The Green colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.
The Red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.
The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
The reference date for all price data, currency, technical indicators, support, and resistance levels is August 21, 2023. The reference data in this report has been partly sourced from REFINITIV.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index
USD: United States dollar
Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.
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