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PayPal stock price forecast as active users soared to 429M

PayPal stock price forecast as active users soared to 429M

Last updated 24th Jun 2022
Disclosure
  • PayPal stock price bounced back after strong earnings.
  • The company added over 2 million users in Q4.
  • The management expects that its users will grow by 10 million in 2022.

The PayPal stock price jumped by more than 4% in extended hours after the company published strong quarterly results. The shares rose to $86.20, which was slightly above the highest level this week. As a result, the company’s market cap has moved to about $96 billion, which is substantially below its all-time high of over $300 billion.

PayPal earnings review

PayPal is a leading fintech company that offers a diverse number of services. The flagship product allows people to send and receive money around the world. In 2021, it introduced a service that lets people buy Ethereum online and other cryptocurrencies.

PayPal, like other fintech companies, have struggled in the past few months as investors worry about growth. As a result, the company’s market cap fell below $100 billion for the first time since 2020.

PayPal’s revenue rose by 7% to $6.48 billion. Excluding eBay, the company’s revenue rose by 15%. The firm added over 2.4 million users in the first quarter, bringing the total active base to 429 million.

Its new Buy Now, Pay Later franchise rose by 256% in Q1 to $3.6 billion while its BrainTree volume tose by 61%. This growth was helped by the strong growth of firms like Airbnb, Uber, and Live Nation, which did well as the reopening continued.

Venmo’s volume jumped by 12% to $58 billion. It now has over 85 million users in the US. The company expects that it will add about 10 million users this year. The firm withdrew its guidance, saying:

“We will continue to guide revenue and earnings on both a quarter and full year basis and continue to update you on how we are thinking about our business over the long term.”

PayPal is an undervalued company that is trading at a trailing price-to-earnings ratio of 23 and a forward PE of 27.13.

PayPal stock price forecast

The daily chart shows that the PYPL share price has been in a spectacular downward trend in the past few months. This month, the stock moved below the important resistance level at $91.90, which was the lowest level this year.

It remains below the 25-day and 50-day moving averages while the Relative Strength Index has moved to the oversold level. Therefore, the stock will likely resume the downward trend despite the post-earnings jump. If this happens, the PayPal stock price will likely keep falling.

Crispus Nyaga

Crispus Nyaga

Crispus is a financial analyst with over 9 years in the industry. He covers cryptocurrencies, forex, equities, and commodities for some of the leading brands. He is also a passionate trader who operates his family account. Crispus lives in Nairobi with his wife and son.