- PayPal share price continued its recovery this week.
- The company will start to report Venmo as a separate division.
- PayPal will publish its financial results on May 5 this year.
PayPal stock price continued its recent rebound after the new Chief Executive Officer (CEO) made some major changes to its reporting process. PYPL jumped to $50, up by 32% from its lowest level this year. So, will the stock continue rising ahead of the upcoming earnings on May 5?
PayPal Tweaks Venmo Reporting
PYPL stock has rebounded over the past few weeks, a trend that may continue as traders focus on upcoming earnings reports. According to CNBC, the company is considering separating Venmo from its other operations.
Venmo, a popular peer-to-peer payments platform, will now be reported as a standalone business, making it easier to track its progress. At the same time, the division will have a new leader with a background in digital banking.
The new separation could mark the initial stages of PayPal spinning off Venmo into a separate, publicly traded company. It may decide to sell it, possibly to another fintech company or a private equity company.
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Venmo, which has over 100 million users, is one of PayPal’s most valuable businesses, with some analysts pegging its valuation at over $15 billion.
The new reports come as PayPal prepares to release its financial results on May 5. Analysts tracking the company expect the upcoming report to show that its revenue will come in at $8.05 billion, up just 3.38% from the same period last year.
Its annual revenue is expected to rise by 2.8% to $34 billion. In the past, PayPal was one of the fastest-growing fintech companies in the world, posting double-digit growth.
The most important part of PayPal’s business is that it has become a bargain, with its forward price-to-earnings ratio at 9.36, well below that of other companies in the industry. The S&P 500 Index has a multiple of 23.
This cheap valuation has made PayPal an attractive company among acquirers, with Stripe expected to make a bid. It is unclear whether PayPal will agree to be acquired at this valuation, as the new CEO likely believes that he can execute a turnaround.
PayPal Stock Price Prediction: Technical Analysis
The daily timeframe chart shows that the PYPL stock crashed to a low of $38 after the last earnings report. It formed a large gap, which the stock has been filling since then.
PayPal share price has now moved above the 23.6% Fibonacci retracement level at $48. Also, it has moved above the 50-day Exponential Moving Average (EMA) and is now attempting to cross the 100-day EMA.
It has also moved above the Supertrend indicator. Therefore, the stock will likely continue rising, potentially to the 50%Fibonacci retracement level at $58. This rebound will happen as investors wait for the earnings, during which Enrique Lores will share his strategy to turn the company around.
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