Financial Trading Blog
Stock of the day 20/07/2016 – PayPal Holdings Inc
It’s been almost exactly a year since PayPal was spun off from its former owner eBay, the online seller sending its increasingly more successful acquisition off into the wild to fare for itself. Since then the stock has seen plenty of drama, lurching within a $10 trading band between $32 and $42 for most of its existence.
(Source: IT-Finance.com 20/07/2016)
That trend continued into 2016, with lows of $30.52 a third of the way through January and all-time highs of $41.75 near the end of March. Recently the run-up to the Brexit referendum, and post-result reaction, pushed the stock back to $34, before a robust recovery took PayPal all the way to a current trading price of $39.38 (IT-Finance.com, 20/07/2016).
Yet despite its rather volatile market performance PayPal will be aiming for a hat-trick of strong 2016 earnings releases when it reveals its second quarter update on Thursday. Back in January PayPal revealed its Q4 report, posting earnings per share of $0.36 (a cent ahead of expectations) with a better than forecast 17% rise in revenue to $2.6 billion, leaving full year EPS and revenue at $1.28 and $9.2 billion respectively. The first quarter figures in April were similarly impressive; revenue surged 19% to $2.54 billion, while EPS came in at $0.37. The most notable news, however, was the success of payment-sharing app Venmo, which more than doubled its Q1 revenue year-on-year to $3.2 billion.
In terms of its Q2 figures PayPal is expected to post earnings per share of $0.36 alongside revenue of $2.6 billion; of course the stock’s infancy means there is nothing to compare this to year-on-year, though quarter-on-quarter it seems remarkably consistent. Beyond the headline figures given the fact that the UK is the second biggest market for PayPal expect some kind of comment on the Brexit and what it means for the company’s guidance going forwards.
PayPal Holdings Inc has a consensus rating of ‘Buy’ with an average target price of $43.26.
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