Digital payment platform PayPal, Inc. (NASDAQ: PYPL) Shares have recently staged a rebound with benchmark indices but may lose steam again. Growth in both the top and bottom-line is slowing as evidenced by its Q4 2021 earnings results. This combined with the market sell-off created a perfect storm, with the stock hitting a 52-week low of $ 92.25 on March 8, 2022, before rising nearly 30%. The company has stopped cross-border transactions with Russia due to the Ukraine invasion. This exit from eBay (NASDAQ: EBAY) has clearly affected growth, but the top line is still growing 22% ex eBay and is expected to grow 32% in the 2022 quarter of 2022. Rising inflation has affected the lower income level of its 425 million customer base. Supply chain deficits affect small businesses. However, the company expects that these temporary headwinds will be lost in the second half of 2022, along with the former eBay pressure. Wise investors looking for exposure to the top e-commerce player may see the opportunistic pullback in PayPal shares.
Q4 2021 Earnings Report
PayPal reported its Q21 earnings for the quarter ended February 2021, ending February 1, 2021. The company reported earnings per share (EPS) of $ 1.11, and compliance analyst estimates are missing $ 1.12, (- $ 0.01). Revenue grew 13.1% year-on-year (YoY) to $ 6.92 billion and $ 6.89 billion, according to consensus analysts. The company added 49 million net new active accounts for a total of 426 million active accounts, with a record 5.33 billion transactions for the quarter. The turnover per active account increased by 11% to 45% as the company generated $ 5.4 billion in annual free cash flow.
Morgan Stanley Technology, Media, and Telecom Conference 2022
On March 8, 2022, PayPal CEO Dan Schulmann presented at the Morgan Stanley Technology Conference. He noted that PayPal has less than half a percent exposure to Russia and Ukraine. The company had already decided to leave the Russian domestic market a few years ago and suspended cross-border services. He went on to answer questions posed by Morgan Stanley analyst James Fawcett. CEO Shulman commented that the epidemic-driven ramp-up has resulted in three permanent secular tailwinds. E-commerce is the first secular tailwind. Retailers focus on trade from all channels where digital space is a top focus. They are constantly trying to find ways to connect with customers digitally through new places. Second, digital payments are on the rise worldwide. Less cash and more digital for faster payments. Even the central banks are negotiating with the company about the central bank-issued digital currency. Third, the rise of digital wallets and checkouts is a rapidly expanding tailwind. He said that these three tailwinds have a long-term trend regardless of the specific part. However he acknowledged that their numbers were not enough to defeat President Conte’s government. We were obviously a little ahead of ourselves to see what was happening in the early days of the epidemic, but if you look at the underlying strengths of our business, yes, look at the fourth quarter, I think the former eBay, our growth was 22%. You look at more than two years ago, in the fourth quarter, the former eBay, our growth was 25%. So we’ve got a really strong underlying growth. We have a lot of things that we are lapping up, eBay and our highest growth quarters. But what I’m seeing now is that the core business points to good energy. “
Life after eBay
CEO Shulman acknowledges that changes to his own managed payments will put growing pressure on about $ 1.4 billion in 2021. It should be dissolved in 1H 2022 after increasing pressure of $ 600 million. He is looking forward to lapping up eBay pressure and will eventually be able to paint a picture of strong growth. The former eBay is moving forward. He expects 32% growth in Q2 of 2022. Thanks to many initiatives to launch digital wallets and crypto, starting with the former eBay’s Buy Now Pay Letter (BNPL).
PYPL price trajectories
Using rifle charts in a weekly and daily time frame provides an accurate view of the landscape for PYPL stocks. Weekly Rifle Chart is close to 91.99 Fibonacci (Five) layer. Weekly Lower Market Structure (MSL) Buy the breakout trigger through 119.38. The weekly rifle chart downtrend has stalled because the 5-period moving average (MA) is at 1 111.76 for a channel driven by the weekly stochastic effort to make a 20-band mini-sin at 15 133.09 towards the 15-period MA. Weekly 200-period MA resistance sits at $ 157.75. The Daily Rifle chart has a very tight MA with a daily 50-period MA overlapping at $ 115.93 and a 5-period MA at 6 116.34 and a 15-period MA at $ 116.60 all acting as an immediate resistance as the daily Stochastic Mini works towards the 60-band. Daily Upper Bollinger Bands (BBs) sit at $ 131.79 and lower BBs at $ 94.51. Wise investors can find Opportunistic pullback entry levels at $ 106.57, $ 100.69 fib, $ 95.33 fib, $ 91.99 fib, $ 87.63, $ 82.07 fib, $ 75.57, and $ 71.04 fib. Upside trajectories range from $ 135.84 fib level to $ 183.99 fib level.