What happened

PayPal (PYPL -1.84%) investors have had a rough go of it lately, and Wednesday wasn't any better, with the stock down 6.7% as of 1:43 p.m. ET. The stock is now down nearly 70% from its 52-week highs.

There wasn't much in the way of "new" news on Wednesday, but a financial analyst at SMBC Nikko Securities kept his "underweight" rating on the stock and lowered his price target. That added to recent negativity brought on by fears over a potential recession as well as by Walmart's poaching of PayPal's chief financial officer last week.

So what

On Wednesday, a SMBC Nikko analyst lowered his price target on PayPal to $105 from $125. That's still a bit higher than Paypal's $97 price as of this afternoon, but investors never like to see the dreaded "underperform" rating or the directional action of a lowered price target. Given that PayPal had already fallen so far, one would have hoped for some relief even from former bears. But not today.

This analyst is interesting as he initiated PayPal with an "underperform" rating back in November when the stock had a $200 price target. What shareholders wouldn't give for that price again! However, high inflation, geopolitical conflict, and a couple of disappointing earnings reports later, and the analyst keeps moving down his target as the market has soured on fintech stocks in a big way.

Worried-looking person stares at a laptop in a kitchen setting.

Image source: Getty Images.

Now what

On its last earnings report, PayPal guided for between $4.60 and $4.75 in adjusted (non-GAAP) earnings per share (EPS) for 2022, which puts the stock at roughly 20.5 times that figure. However, keep in mind that those projections were given before Russia's invasion of Ukraine. In addition, investors should prepare for an ugly-looking first quarter as revenue is only projected to grow 6% before accelerating in the back of the year.

That's because PayPal is still running down its eBay (EBAY -1.12%) business as PayPal's former parent is in the final stages of switching its processing service over to another provider. However, PayPal will still be an option for buyers on eBay's platform. Without the eBay effect, revenue is projected to grow 14%. Management expects the rundown of eBay revenue to finish by mid-year, which is why revenue should accelerate in the back half.

Still, this could be a choppy year for PayPal as there are several moving pieces under the hood. The stock looks like a solid value here if it can hit its guidance for the year and accelerate revenue in the back half. However, given higher interest rates, the war in Ukraine, and mixed signals coming from the U.S. consumer, visibility is low and uncertainty is high.