PayPal (NASDAQ:PYPL) Trading Up 3.2% – Should You Buy?

PayPal Holdings, Inc. (NASDAQ:PYPL)’s share price traded up 3.2% on Thursday . The stock traded as high as $59.79 and last traded at $59.78. 10,725,090 shares were traded during mid-day trading, a decline of 44% from the average daily volume of 19,283,207 shares. The stock had previously closed at $57.93.

Key Headlines Impacting PayPal

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: PayPal continues to screen as a value opportunity after its substantial multiyear decline. Analysts point to relatively attractive valuation metrics, earnings performance above consensus, and ongoing cost-efficiency and turnaround efforts as potential catalysts. Here’s Why PayPal Is a Strong Value Stock
• Positive Sentiment: PayPal was highlighted in a payments-industry outlook alongside Visa, Mastercard, Fidelity and WEX, keeping attention on the company’s potential relative value and competitive position. Zacks Industry Outlook: Visa, Mastercard, PayPal, Fidelity and WEX
• Positive Sentiment: An analyst upgrade provided additional support for PayPal’s investment case, reinforcing the view that the shares may be undervalued following their long-term decline. PayPal Trading Up After Analyst Upgrade
• Neutral Sentiment: Activist investor Carl Icahn is urging eBay to overhaul its board and spin off PayPal, citing governance concerns and potential conflicts. A separation could increase PayPal’s strategic independence, but the proposal remains uncertain and primarily targets eBay. What Does eBay Face After Carl Icahn Demands a Board Overhaul?
• Negative Sentiment: PayPal’s shares remain below the $60.50 bid previously rejected by its board, signaling that investors are skeptical a transaction will materialize or that the company can justify a higher valuation without further operational proof. PayPal Still Trades Below the $60.50 Bid Its Board Turned Down
• Negative Sentiment: Although PayPal appears inexpensive on earnings, analysts also flag weaker growth, leaving investors dependent on successful execution of the turnaround and cost-cutting plans. PayPal Stock Looks Undervalued on Earnings but Weaker on Growth

Wall Street Analysts Forecast Growth

PYPL has been the subject of a number of recent research reports. Cantor Fitzgerald lifted their price objective on PayPal from $54.00 to $60.00 and gave the company a “neutral” rating in a research note on Monday, August 3rd. Robert W. Baird raised their price target on PayPal from $50.00 to $57.00 and gave the company a “neutral” rating in a report on Wednesday, July 29th. BNP Paribas Exane increased their price objective on shares of PayPal from $43.50 to $52.00 and gave the company a “neutral” rating in a research report on Tuesday, July 21st. BTIG Research restated a “neutral” rating on shares of PayPal in a research note on Wednesday, July 15th. Finally, Clear Str raised shares of PayPal to a “hold” rating in a report on Thursday, July 16th. Nine analysts have rated the stock with a Buy rating, thirty-four have assigned a Hold rating and four have issued a Sell rating to the stock. According to data from MarketBeat.com, PayPal currently has an average rating of “Hold” and an average target price of $55.72.

PayPal Trading Down 1.2%

The stock has a fifty day simple moving average of $48.47 and a 200 day simple moving average of $47.15. The company has a debt-to-equity ratio of 0.55, a quick ratio of 1.29 and a current ratio of 1.29. The firm has a market cap of $50.53 billion, a P/E ratio of 11.17, a price-to-earnings-growth ratio of 1.46 and a beta of 1.30.

PayPal (NASDAQ:PYPL) last announced its quarterly earnings results on Tuesday, July 28th. The credit services provider reported $1.38 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.28 by $0.10. PayPal had a return on equity of 24.39% and a net margin of 14.36%.The firm had revenue of $8.68 billion for the quarter, compared to the consensus estimate of $8.47 billion. During the same period in the prior year, the company posted $1.40 earnings per share. The company’s quarterly revenue was up 4.8% on a year-over-year basis. On average, research analysts expect that PayPal Holdings, Inc. will post 5.37 earnings per share for the current fiscal year.

PayPal Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Friday, September 25th. Shareholders of record on Friday, September 4th will be paid a dividend of $0.14 per share. The ex-dividend date is Friday, September 4th. This represents a $0.56 annualized dividend and a yield of 0.9%. PayPal’s dividend payout ratio is currently 10.59%.

Insider Activity

In related news, CAO Chris Natali sold 1,337 shares of the stock in a transaction that occurred on Wednesday, July 29th. The shares were sold at an average price of $58.10, for a total transaction of $77,679.70. Following the transaction, the chief accounting officer owned 2,216 shares in the company, valued at $128,749.60. This represents a 37.63% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Suzan Kereere sold 3,379 shares of the firm’s stock in a transaction that occurred on Wednesday, June 3rd. The stock was sold at an average price of $42.79, for a total transaction of $144,587.41. Following the completion of the sale, the insider owned 30,983 shares in the company, valued at $1,325,762.57. This represents a 9.83% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 10,612 shares of company stock valued at $484,534 in the last 90 days. 0.63% of the stock is currently owned by insiders.

Hedge Funds Weigh In On PayPal

Hedge funds and other institutional investors have recently modified their holdings of the company. First National Bank of Omaha purchased a new position in shares of PayPal in the 2nd quarter worth $245,000. Mowery & Schoenfeld Wealth Management LLC purchased a new stake in PayPal during the second quarter valued at $27,000. Equity Investment Corp purchased a new stake in PayPal during the second quarter valued at $142,408,000. Meeder Advisory Services Inc. bought a new position in PayPal in the second quarter valued at about $578,000. Finally, Citizens Financial Group Inc. RI bought a new position in PayPal in the second quarter valued at about $679,000. 68.32% of the stock is owned by institutional investors.

PayPal Company Profile

PayPal Holdings, Inc operates a global digital payments platform that enables consumers and merchants to send and receive payments online, on mobile devices and at the point of sale. The company provides a broad set of payment solutions, including a digital wallet, merchant payment processing, checkout services, invoicing and fraud-management tools. PayPal’s platform is designed to support e-commerce, in-person retail and person-to-person transfers, targeting both individual consumers and businesses of varying sizes.

Key products and services in PayPal’s portfolio include the PayPal wallet and checkout ecosystem, the Venmo peer-to-peer mobile app, Braintree’s developer-focused payment gateway, Xoom for international money transfers, and PayPal Credit and buy-now-pay-later options.