PayPal (NASDAQ:PYPL) Shares Gap Down – Should You Sell?

Shares of PayPal Holdings, Inc. (NASDAQ:PYPL) gapped down prior to trading on Friday . The stock had previously closed at $61.47, but opened at $53.74. PayPal shares last traded at $54.46, with a volume of 12,366,635 shares changing hands.

PayPal News Roundup

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: With the reported bid no longer progressing, PayPal can focus on executing its standalone turnaround strategy. Some investors argue the board’s earlier rejection of an offer near $60.50 per share preserved potentially greater long-term value for shareholders. PayPal Drops 12% Overnight on Dead Stripe Deal
• Positive Sentiment: Recent operating results provide some support for the standalone case: PayPal exceeded second-quarter earnings and revenue expectations, while revenue increased approximately 4.8% year over year. New integrations enabling PayPal and Venmo tuition payments through campus-payment platforms could provide an additional growth avenue. PayPal Tuition Payment Push
• Neutral Sentiment: The reported decision appears to be a name-specific catalyst rather than a broad financial-sector move. Market attention is also focused on Federal Reserve Chair Kevin Warsh’s Jackson Hole speech, which could influence interest-rate expectations across the market. Five Things to Know Before the Market Opens
• Negative Sentiment: The collapse of the reported roughly $50 billion-$53 billion buyout removes the premium investors had anticipated and leaves PayPal responsible for proving its turnaround without an acquirer. Reports said the consortium walked away after negotiations over valuation and deal terms, prompting a sharp reversal in PYPL shares. PayPal Shares Fall After Takeover Pursuit Is Abandoned
• Negative Sentiment: Investors must now place greater weight on PayPal’s moderate revenue growth, competitive pressures and execution under its standalone leadership, rather than the possibility of a near-term acquisition payout. PayPal Takeover Bid Reportedly Ends

Wall Street Analysts Forecast Growth

A number of analysts have recently weighed in on the stock. The Goldman Sachs Group set a $50.00 price target on shares of PayPal in a report on Tuesday, July 28th. Royal Bank Of Canada lifted their price objective on shares of PayPal from $59.00 to $65.00 and gave the company an “outperform” rating in a research note on Wednesday, July 29th. Robert W. Baird raised their target price on PayPal from $50.00 to $57.00 and gave the company a “neutral” rating in a report on Wednesday, July 29th. Weiss Ratings upgraded PayPal from a “hold (c-)” rating to a “hold (c)” rating in a research note on Monday. Finally, Truist Financial boosted their price target on PayPal from $59.00 to $62.00 and gave the stock a “hold” rating in a report on Wednesday, August 19th. Nine research analysts have rated the stock with a Buy rating, thirty-four have assigned a Hold rating and four have assigned a Sell rating to the company’s stock. According to MarketBeat.com, PayPal has an average rating of “Hold” and an average price target of $56.14.

PayPal Price Performance

The firm has a market cap of $46.52 billion, a P/E ratio of 10.28, a price-to-earnings-growth ratio of 1.51 and a beta of 1.30. The company has a current ratio of 1.29, a quick ratio of 1.29 and a debt-to-equity ratio of 0.55. The business has a 50-day moving average of $53.66 and a two-hundred day moving average of $48.07.

PayPal (NASDAQ:PYPL) last issued its quarterly earnings data on Tuesday, July 28th. The credit services provider reported $1.38 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.28 by $0.10. PayPal had a net margin of 14.36% and a return on equity of 24.39%. The business had revenue of $8.68 billion during the quarter, compared to analyst estimates of $8.47 billion. During the same quarter last year, the business earned $1.40 EPS. The firm’s quarterly revenue was up 4.8% on a year-over-year basis. On average, sell-side analysts anticipate that PayPal Holdings, Inc. will post 5.38 earnings per share for the current fiscal year.

PayPal Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Friday, September 25th. Stockholders of record on Friday, September 4th will be paid a dividend of $0.14 per share. The ex-dividend date of this dividend is Friday, September 4th. This represents a $0.56 annualized dividend and a dividend yield of 1.0%. PayPal’s dividend payout ratio (DPR) is presently 10.59%.

Insider Activity

In other news, insider Frank Keller sold 4,612 shares of the firm’s stock in a transaction dated Wednesday, June 3rd. The stock was sold at an average price of $42.54, for a total transaction of $196,194.48. Following the completion of the transaction, the insider directly owned 41,567 shares in the company, valued at $1,768,260.18. This trade represents a 9.99% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Chris Natali sold 1,337 shares of the company’s stock in a transaction on Wednesday, July 29th. The shares were sold at an average price of $58.10, for a total transaction of $77,679.70. Following the sale, the chief accounting officer directly owned 2,216 shares in the company, valued at $128,749.60. This trade represents a 37.63% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders sold 14,774 shares of company stock valued at $738,249. Insiders own 0.63% of the company’s stock.

Institutional Investors Weigh In On PayPal

Hedge funds and other institutional investors have recently modified their holdings of the company. BlackRock Inc. acquired a new position in shares of PayPal during the second quarter worth approximately $3,236,989,000. California State Teachers Retirement System grew its position in PayPal by 4,036.2% in the 2nd quarter. California State Teachers Retirement System now owns 55,904,110 shares of the credit services provider’s stock valued at $2,413,939,000 after purchasing an additional 54,552,522 shares during the period. Bank of America Corp DE lifted its stake in shares of PayPal by 67.9% in the first quarter. Bank of America Corp DE now owns 25,614,720 shares of the credit services provider’s stock valued at $1,158,554,000 after buying an additional 10,356,256 shares in the last quarter. Norges Bank bought a new position in shares of PayPal in the fourth quarter valued at $949,758,000. Finally, Amundi grew its holdings in shares of PayPal by 227.6% during the first quarter. Amundi now owns 13,804,208 shares of the credit services provider’s stock valued at $624,364,000 after buying an additional 9,590,488 shares during the last quarter. Institutional investors own 68.32% of the company’s stock.

PayPal Company Profile

PayPal Holdings, Inc operates a global digital payments platform that enables consumers and merchants to send and receive payments online, on mobile devices and at the point of sale. The company provides a broad set of payment solutions, including a digital wallet, merchant payment processing, checkout services, invoicing and fraud-management tools. PayPal’s platform is designed to support e-commerce, in-person retail and person-to-person transfers, targeting both individual consumers and businesses of varying sizes.

Key products and services in PayPal’s portfolio include the PayPal wallet and checkout ecosystem, the Venmo peer-to-peer mobile app, Braintree’s developer-focused payment gateway, Xoom for international money transfers, and PayPal Credit and buy-now-pay-later options.