PayPal Holdings Inc. (NASDAQ:PYPL) Recent Earnings Shows Major Concern

PayPal Holdings Inc. (NASDAQ:PYPL) Recent Earnings Shows Major Concern

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The PayPal Holdings Inc. (PYPL) shares are trading at lower $170.87 and the avg recommendation for the stock is Strong Buy. The current analyst price target stands at $160.94.

To add more color to this target, the company’s high over the last year is $175.40 and the low is $82.07. Over the last 52 weeks, PYPL is down -2.58% while the S&P 500 is down -2.38%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, PYPL reported a profit of $1.89 billion. PayPal Holdings Inc. also saw revenues increase to $4.62 billion. In addition, PYPL has free cash flow of $1.3 billion as of 03-2020 The company’s EBITDA came in at $691.0 million which compares well with its peers.

PYPL booked profit margins of 10.30%, its Return on Equity (ROE) is 11.50%, and its Return on Assets is 3.70%. All told, it is clear that, PYPL needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. PYPL has a short ratio of 1.66 and outstanding shares of 1.17B.

Company Outlook

PYPL has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 8.45 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 1.58. PayPal Holdings Inc. PYPL also noted assets of $54.27 billion at the end of the last quarter. Investors should also keep an eye on sector updates as PYPL has historically followed its peers on positive news.

All told, PayPal Holdings Inc. PYPL has strung together solid data and demonstrated underlying fundamentals. At its current valuation, PYPL represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

PayPal Holdings Inc. PYPL is now commanding a market cap of 202.51B and a float of 1.17B. PYPL is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of PYPL stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in PYPL, either long or short, and we have not been compensated for this article.