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Is This an Overreaction to PayPal's Earnings?

By Jose Najarro – Nov 11, 2021 at 10:30AM

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PayPal is expanding its crypto and buy-now-pay-later products.

Today's video focuses on PayPal (PYPL 4.88%) and its recent earnings, reported on Nov. 8 after the market closed. Here are some highlights from the video.

  1. PayPal reported revenue of $6.18 billion, up 13% year over year (YOY) and down 1% quarter over quarter. Total payment volume of $310 billion for the quarter was up 26% YOY. Management informed investors that eBay's (EBAY 2.50%) merchant services continue to see a substantial decline compared to a year ago. Excluding eBay's merchant services, revenue and total payment volume would have grown at more robust levels.   
  2. In mid-October, PayPal completed its acquisition of Paidy, a Japanese buy-now-pay-later platform. Management also announced the recent expansion of PayPal's crypto services in the UK, and more importantly, Venmo will be an accepted payment solution for Amazon (AMZN 7.38%) starting in 2022.
  3. The guidance for PayPal's upcoming quarter and preliminary results for next year's revenue did not meet analysts' expectations. Following earnings, numerous analysts have cut their price target for PayPal. PayPal's stock price is down over 33% from its 52-week high. 

Click the video below for my full thoughts and analysis. 

*Stock prices used were the midday prices of Nov. 10, 2021. The video was published on Nov. 10, 2021.

 
  

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jose Najarro owns shares of PayPal Holdings. The Motley Fool owns shares of and recommends Amazon and PayPal Holdings. The Motley Fool recommends eBay and recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, short January 2022 $1,940 calls on Amazon, and short January 2022 $82.50 calls on eBay. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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