PayPal Tumbles As Revenue Growth Misses In Earnings Report

PayPal Holdings (PYPL) on Wednesday reported second-quarter earnings and total payment volume that topped analyst estimates. But PayPal stock tumbled as revenue missed Wall Street targets amid former parent eBay‘s (EBAY) phase-out of an e-commerce partnership.




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PayPal’s revenue guidance for the third-quarter missed analyst estimates.

For the quarter ended June 30, PayPal earnings for the second quarter came in at $1.15 per share, up 7% from a year earlier. San Jose, Calif.-based PayPal said revenue rose 17% to $6.24 billion, including the acquisition of Honey Science.

Analysts expected PayPal earnings of $1.13 a share on revenue of $6.27 billion. A year earlier, PayPal earned 1.07 a share on sales of $5.26 billion.

Total payment volume processed from merchant customers jumped 40% to $311 billion. Analysts had projected total payment volume of $295.2 billion.

PayPal stock tumbled 6.2% to near 283 in extended trading on the stock market today. Heading into the PayPal earnings report, shares traded in a buy zone from a flat-base entry point of 296.11.

In addition, PayPal stock belongs to the IBD Leaderboard.

PayPal Stock Weathers EBay Phase-Out

For the quarter ending in September, PayPal forecast revenue in the range of $6.15 billion to $6.25 billion, representing growth of about 14%, below analyst estimates of 19% growth to $6.48 billion.

PayPal recently announced that it will hike prices in August for branded services, such as online checkout.

PayPal said it added 11.4 million net new active accounts worldwide in the June quarter. The digital payment company had 403 million active accounts worldwide as of June 30.

PayPal has expanded consumer offerings, with the Honey acquisition and other moves. It jumped into the “buy-now-pay-later” financing market in late 2020. But BNPL competition is expected to increase with Visa.

PayPal stock holds a Relative Strength Rating of 85 out of a possible 99.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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William Murphy

William Murphy

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