PayPal Holdings (NASDAQ:PYPL) stock slipped 5.1% in Friday midday trading after the payment tech firm once again lowered expectations for coming quarters.
The company guided for Q4 revenue of ~$7.38B, trailing the consensus of $7.74B.
For 2023, Truist Securities analyst Andrew Jeffrey expects PayPal's (PYPL) revenue to grow faster than Amazon's (AMZN) but to lag Visa (V) and Mastercard's (MA) projected low-to-mid teens percentage growth. "Over time we think PayPal will struggle to grow faster than eComm, given its significant off-Amazon share," the analyst wrote. Jeffrey has a Hold rating on the stock.
The new guidance should help adjust expectations, as consensus has been perpetually too high, said Oppenheimer analyst Dominick Gabriele, who has an Overperform rating on the stock. His 2023 guidance incorporates a slowdown in consumer discretionary spending given inflation's effect on non-discretionary items.
"Underlying growth internationally and domestically (are) outpacing most reported peers, and post sell-off PYPL could be seen as a safe haven if management continues to executive," Gabriele said.
Also weighing on shares, PayPal (PYPL) didn't see the same early start to the holiday season as in 2021 due to weakness in the eurozone tied to inflation, rising energy prices and reduced discretionary spending from middle- and low-income consumers, according to Evercore ISI analyst David Togut, who an Outperform rating on the stock. The firm's expense discipline should help cushion the slower ecommerce sales, he said.
On Thursday, PayPal stock slid in after-hours trading on soft guidance for new active accounts, Q4 revenue
SA contributor Julian Lin explains why he's buying on the dip.