On Friday, PayPal’s stock dropped 2.75% to $77.88 during a mixed trading session. While the Dow Jones Industrial Average rose 0.33% to 42,313.00, the S&P 500 Index fell 0.13% to 5,738.17. PayPal closed just $2.55 below its 52-week high of $80.43, reached on September 26. In the past month, PayPal shares have increased by 7.1%, outpacing the S&P 500’s growth of 2%.
Looking ahead, investors are keen to understand the stock’s future direction. Earnings revisions play a crucial role in stock performance. An increase in earnings estimates typically leads to a higher fair value for the stock, which attracts more buyers and pushes the price up.
For the current quarter, PayPal (NASDAQ:PYPL) is expected to report earnings of $1.06 per share, reflecting an 18.5% decrease from last year. The earnings estimate for the current fiscal year is $4.42, down 13.3% from the previous year.
However, for the next fiscal year, the estimate rises to $4.89, indicating a potential increase of 10.8%.
Strong Revenue Projections and Consistent Performance Drive Future Success of PayPal
Earnings are important, but consistent revenue growth is essential for long-term success. PayPal’s consensus revenue estimate for the current quarter is $7.85 billion, showing a 5.8% increase year-over-year.
For the current and next fiscal years, revenue estimates are $31.94 billion and $34.38 billion, suggesting growth of 7.3% and 7.6%, respectively. In the last reported quarter, PayPal (NASDAQ:PYPL) generated $7.89 billion in revenue, an 8.2% increase from the previous year.
Earnings per share (EPS) was $1.19, up from $1.16 a year ago. This revenue exceeded Consensus Estimate of $7.8 billion by 1.04%, and the EPS surprised by 23.96%. PayPal (NASDAQ:PYPL) has consistently outperformed consensus estimates in both revenue and earnings over the past four quarters.
Overall, while recent performance has been strong, future growth will depend on earnings and revenue trends, as well as how the market perceives PayPal (NASDAQ:PYPL)’s value.
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