PayPal Holdings Inc. (NASDAQ: PYPL) has confirmed the release date to be November 8, 2021, after market close.
What to look for
Since the start of last year, PayPal has introduced a series of products that include the “buy now pay later” solution, QR code payments, cryptocurrency support, and a new mobile app featuring customized shopping tools. The company has 32 million merchant accounts which are vital to its strategic serving of customers. The new products the company has launched will continue boosting its revenue growth and earnings in the quarters ahead.
Earnings: Stockearning’s estimated EPS for Q3 2021 is $1.07, dropping from $1.15 per share. The drop results from the company not including strategic investments in the quarter under review with last year's results including strategic investments. Historical EPS Performance over the past 12 quarters shows that the company has topped estimates 11 times (91%) and missed only once (8%). In Q2 2021, the company reported EPS of $1.15, topping estimates of $0.12 per share.
Revenue: The company expects Q3 revenue of $6.2 billion, representing a 13.5% YoY top-line growth. Management had guided for revenue of between $6.15 and $6.25 billion for Q3. In Q2, the company has guided for revenue of $6.25 billion but reported revenue of $6.24 billion with net profit dropping 23% YoY to $1.18.
Stock movement: Since the last earnings release, PayPal shares have lost 14.4%. The stock has been UP 15 times out of the last 24 quarters after the earnings release. So, the historical price reaction suggests a 62% probability of the share price going UP once PayPal releases Q3 2021 earnings. According to the Stockearning algorithm, the predicted first-day move is 5%, while the predicted move on the seventh day is 6%.
What analysts are saying
Deutsche Bank analyst Bryan Keane has indicted that PayPal’s move to acquire Pinterest will strategically improve the value proposition for consumers and merchants, which will allow it to "move up the sales funnel with discovery and pushing contextual commerce." In a research note to investors, the analysts said that the integration of Pinterest’s experience-based platform with the payments processing company's Super App and in-app purchase capabilities via Honey would significantly increase user transactions. In addition, Keane said there are considerable revenue synergies from shopping engagement and a potential cross-selling Pinterest marketing model to PayPal and Venmo to create new ad revenues. As a result, the analyst reiterated his "Buy" rating on the stock.
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