PayPal
PayPal shares are down 60% this year to $72.23 as the flight from tech stocks continues. Earlier this year, activist investor Elliott Management took a $2 billion stake in the online payments technology company and persuaded it to return up to $15 billion to investors. Recent third-quarter results were strong, with net revenue up 11% to $6.9 billion, while free cash flow rose 37% to $1.8 billion.
Meanwhile, total payment volume grew 9% to $337 billion. PayPal also raised its full-year earnings forecast. As stocks were hit by negative sentiment around weaker earnings forecasts, it raised its GAAP EPS earnings forecast from around $2.11 to $2.13. An Investor Day, due to be held early next year, could provide a flow of stock news.
Analysts at broker Goldman Sachs lowered their price target on the shares after the third quarter results from $127 to $110. However, this still implies more than 40% upside potential. Although the cost of living crisis may affect short-term earnings, PayPal dominates the online payments market and it looks like a decent entry point for investors.
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