PayPal stock price forecast after earnings and Amazon deal
The PayPal stock price crashed by more than 3% in the premarket as investors reflected on the company’s earnings and a deal with Amazon. The stock is trading at $221.50, which is lower than Monday’s close of $230.
PayPal is a giant fintech company that offers a wide range of services to companies and individuals. The company’s flagship product is its payment platform that enables people to send money to their friends and family members.
PayPal also offers business solutions that enable companies to accept payments. In addition, it owns Venmo, a peer-to-peer company that is facing stiff competition from Square’s Cash App. Further, it owns Honey, a company that helps people find coupons.
PayPal stock price has been under pressure lately as investors have worried about growth. It has crashed by more than 25% from its highest level this year. This means that the stock has crashed into a bear territory.
The weakness is accelerating after the company announced its quarterly results. The company’s payment volume rose by 26% in the third quarter to more than $310 billion. Its total active customers rose to more than 416k while its revenue rose to more than $6.18 billion.
PayPal also announced its strong growth among business customers. For example, it pointed that companies like GoFundMe, Valero, and Philips 66 were adding its QR codes to their platforms.
Most importantly, it noted that Amazon will add its Venmo solutions to its marketplace. That deal will be a gamechanger for Venmo, which has seen slower growth. Also, depending on its success, it could open the possibility of Amazon accepting PayPal altogether.
The Buy Now Pay Later business is also booming as the company processed more than $5.4 billion in this line. It has also added more than 950k merchants in the platform. The company also attempted to acquire Pinterest recently.
Analysts are torn between the future of PayPal’s stock price. On the one hand, some analysts believe that the stock will keep falling as growth stalls. Others, like Jim Cramer believe that the stock will rebound. They cite the company’s diverse suite of solutions and the stickiness of its products.
PayPal stock price forecast
The daily chart shows that the PayPal stock price has been in a deep sell-off recently. It is now trading at its lowest level since December this year. During the decline, the stock has managed to move below the key support level at $234, which was the lowest point in May.
At the same time, the stock has moved below the 20-day and 50-day volume-weighted moving average (VWMA). Also, the MACD has moved in a downward trend. Therefore, the stock will likely keep falling as bears target the key support at $180. In the long-term, however, the stock will likely bounce back higher.