PayPal is the latest big tech company to post earnings this Monday.
PYPL – Weekly Chart
The price of PYPL has found support at the $72 level, and favourable earnings could propel the company higher.
A payments platform with over 430 million users is accepted by 75% of major retailers. Analysts at Bank of America see earnings bouncing back in 2023 after declines last year. Per-share profits are expected to rise at a double-digit pace through 2025. The company also has a low Price-Earnings Growth ratio of 1.09 compared to its 5-year average of 1.09. A forward price/earnings ratio of 13X is also a soft payment firm valuation.
Earnings per share are expected to increase by 25%, to $1.10 from $0.88 last year. PayPal traded around the $300 level in 2021 but has now fallen to the $75 level.
PayPal joined a host of other tech companies cutting staff levels this year. At the end of January, the company said it would cut 2,000 employees or 7% of its workforce.
A cost-cutting drive could add to the value for shareholders, and an upside earnings surprise could propel the stock higher from recent resistance.