PayPal experienced a significant decline in its shares, dropping nearly 11% following a quarter where the company surpassed revenue and earnings expectations. Despite this, PayPal saw a drop in active accounts and provided guidance that fell short of expectations, leading to investor disappointment. However, new CEO Alex Chriss is working to re-accelerate the company’s growth, and Goldman Sachs analyst Michael Ng believes that the company is making the right moves, with the cautious outlook potentially leading to positive outcomes.
In its 4Q23 report, PayPal reported an 8.1% year-over-year increase in revenue and adj. EPS that outpaced analysts’ forecasts. However, total active accounts decreased from 435 million to 426 million, and the company’s guidance for 2024 fell below Wall Street’s expectations. Despite these challenges, Ng reiterated his Buy rating on PayPal shares, expressing confidence in the company’s brand trust and ongoing investment in value-added features.
Overall, analysts are divided on PayPal, with 12 buys and 13 holds. Ng’s target price suggests a potential 32% surge in the shares over the coming year, despite a price target of $69.23. While the company is facing headwinds, it appears there is still optimism about PayPal’s potential for growth in the future.
