PayPal share price forecast as active users grow to 429 million
PayPal’s stock price jumped more than 4% within hours after the company released strong quarterly results. The shares rose to $86.20, which was slightly above the high level this week. As a result, the company’s market capitalization has fallen to around $96 billion, which is significantly lower than its all-time high of over $300 billion.
PayPal Earnings Review
PayPal is a leading fintech company that offers a large number of services. The flagship allows people to send and receive money around the world. In 2021, it introduced a service that allows people to buy Ethereum online and other cryptocurrencies.
PayPal, like other fintech companies, has struggled in recent months as investors worried about growth. As a result, the company’s market cap fell below $100 billion for the first time since 2020.
PayPal’s revenue rose 7% to $6.48 billion. Excluding eBay, the company’s revenue increased by 15%. The company added more than 2.4 million users in the first quarter, bringing the total active base to 429 million.
Its new franchise Buy Now, Pay Later grew 256% in the first quarter to $3.6 billion, while its BrainTree volume fell 61%. This growth was helped by the strong growth of companies like Airbnb, Uber and Live Nation, which performed well as the reopening continued.
Venmo’s volume jumped 12% to $58 billion. It now has over 85 million users in the United States. The company expects to add around 10 million users this year. The company withdrew its advice saying:
“We will continue to guide revenue and earnings on a quarterly and annual basis and continue to update you on how we view our business over the long term.”
PayPal is an undervalued company trading at a price to earnings ratio of 23 and a forward PE of 27.13.
PayPal Stock Price Prediction
The daily chart shows that PYPL’s stock price has been on a dramatic downward trend over the past few months. This month, the stock broke below the important resistance level at $91.90, which was the lowest level this year.
It remains below the 25 and 50 day moving averages while the relative strength index has moved to the oversold level. Therefore, the stock will likely resume its downtrend despite the post-earnings jump. If this happens, PayPal’s stock price will likely continue to decline.