PayPal stock drops after soft Q1, 2022 earnings guidance

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PayPal Holdings (NASDAQ:PYPL) stock slides 12% in after-hours trading after its guidance trails consensus estimates.

The company expects Q1 adjusted EPS of ~$0.87 vs. $1.16 consensus; it also expects Q1 revenue to increase ~6% on a spot basis, with revenue, excluding eBay (NASDAQ:EBAY), to rise ~14%.

For 2022, the payment tech firm expects adjusted EPS of $4.60-$4.75 vs. $5.26 consensus; guides for revenue growth ~15-17% at current spot rates, with revenue, excluding eBay, expected to grow ~19%-21%.

PayPal also expects to add 15M-20M net new active accounts this year, and total payment volume growth of 19%-22% at current spot rates, that's less than the 23% TPV growth it had in 2021.

Q4 non-GAAP EPS of $1.11, trails the average analyst estimate of $1.12 by a penny, matched $1.11 in Q3 and increased from $1.08 in Q4 2020.

Net new active accounts added during the quarter were 9.8M vs. 13.3M in Q3; ends 2021 with 426M active accounts.

Q4 revenue of $6.92B topped the $6.89B consensus increased from $6.18B in Q3; rose 13% from $6.12B in Q4 2020.

Q4 transaction revenue of $6.38B vs. $5.61B in Q3; number of payment transactions 5.34B vs 4.9B in Q3, and Q4 total payment volume of $339.5B vs. $310B in Q3 and rose 23% Y/Y on a spot basis.

Venmo processed $60.6B in TPV in the quarter, up 29% Y/Y and compares with ~$60B in Q3.

Cash flow from operations of $1.8B rose 31% Y/Y and free cash flow of $1.6B, up 38%.

Conference call at 5:00 PM ET.

Earlier, PayPal (PYPL) non-GAAP EPS of $1.11 misses by $0.01, revenue of $6.92B beats by $30M

Comments

[Diesel]

Just a few months ago analysts were touting fintech as the next big thing and traditional banks were dying. Now fintech stocks are down like 2/3 on average from their recent highs.

[EverydayJoeSchmo]

Netflix, Tesla, Robinhood and now Paypal. 20 % haircut. Whos next?

[zoeshamu]

Long $PYPL. PYPL has lower debt than other financial companies like V, MA. So, I will take this opportunity to add more on the dip. So, okay with the sell-off as I was looking for something to add at this time.

[Beppe DL]

@zoeshamu fact remains it’s correcting to a PE in the low 20s in this market . It’ll be dead money for many quarters to come. I’m personally starting to question the whole thesis behind it.

[zoeshamu]

@Beppe DL Not looking too much into PE ratios. I like PYPL as it is and its plans. The only thing I did not like was the Honey acquisition, but otherwise, I have no issues with money sitting dead for a few quarters. I think your generalization of many quarters is dumb. I would see it as only 2 quarters. The 3rd quarter is when I would judge more on.

[Beppe DL]

@zoeshamu what a very classy reply.

[Money&Money,LLC]

I dont like companies that encourage BNBDP(Buy Now BUT Dont Pay). Or companies that freeze customers accounts and withholding their funds. This is no better than a Chinese stock controlled by Xinping.

[HardytheTrader]

Not bad. $PYPL looks fairly valued now. Drop a little more and the stock will be attractive for a long-term investment

[CaptainJackSparrow]

Consistently underperformed the S&P 500 over the last 20 years. Why would someone in their right mind buy this over SPY?

If you're so adamant about getting rid of your money, go to Vegas; at least you can get drunk and see pretty girls.

[Florian Steinberg]

Glad I never bought this stock. I still don't understand why Visa or Mastercard let them steal parts of their business. Can Visa not simply link your e-mail to your Visa card so that you can pay with your e-mail and a password?

For online puchases, I always pay directly with my Amazon Visa card. Takes 20 seconds to punch in the number, never had any issues.

[KimBEAV]

It's still a great company though

[aquamaler]

turning into a value stock

[Hallu]

Wow, sold out in AH at $146 after buying in at $157 last week. Didn't expect this much of a drop on earnings and definitely not interested in riding this down to the $130s

[Mick Research]

@Hallu Warren Buffett once said, “The first rule of an investment is don’t lose money. And the second rule of an investment is don’t forget the first rule. And that’s all the rules there are.”

[Florian Steinberg]

@Mick Research Okay, then tell me how to always buy at the bottom? I am open for any idea, it would be fantastic to always have gains after buying a stock.

Mr. Buffett himself violated his rule big time with the airline purchase and panic sell. he also lost bigly on Kraft/Heinz, didn't he?

[JN25]

@Mick Research nobody perfect...not even Warren Buffett..PayPal is for long term compounding growth

[Clauser1960]

So happy I sold all my Pypl shares in order to increase my positions in Ma Cmg and Cost

[Cristi_an]

should we expect analysts downgrades and lower PTs?

[S4BB3R]

@Cristi_an why, yes, analysts knew this coming all along, but waited for the ER so that they don't distribute inside information!

[Diesel]

Analysts tend to downgrade stocks after they crash and upgrade them after they've doubled.

[Sri007]

Multiple compression happening because of ebay's departure, which is an one time event. It should bounce Q3, Q4 this year, as growth normalizes to ~20%. Any thoughts?

[123AL]

This is a good opportunity to start a position. I expect it to follow NFLX!

[TigerCub911]

Putting in a buy order for $PYPL at $115.15 which is about 20% less than its 52-week low of $144.

[Ice_Kold]

Worse than Netflix and look at the beating they took.

[Fooly Finance]

That came sooner than I thought. Where is the bottom?

seekingalpha.com/...

seekingalpha.com/...

[6BQ5]

Stocks crash faster than they recover. Let's see what kind of tantrum Mr. Market will throw here and just how low it will go. There will be plenty of time to buy in.

[jermyzy]

Argh. Hindsight 20/20 should have sold last summer. Thankfully my ACB is $90, so I'm still in the green. Will offload half my position tomorrow.

[123AL]

@jermyzy this is not time to sell! In a few sessions it will bounce back!

[Geoff_Spicoli]

Bought after hours.