Is PayPal stock still a good buy after earnings fall?

PayPal Holdings (PYPL) shares rose on Tuesday after the payments giant reported mixed third-quarter results and raised its full-year profit forecast.

For the three months ended September 30PayPal’s net income rose 5.8% year-over-year to $7.8 billion, driven in part by a 5.7% jump in payment transactions to $6.6 billion. Meanwhile, its earnings per share (EPS) rose 22.5% year-over-year to $1.20.

“During a highly productive third quarter, PayPal delivered strong financial and operational results,” CEO Alex Criss said in a statement. “We are making significant progress in our transformation, bringing new innovations to market, building important partnerships with leading players in the trade and increasing awareness and engagement with new marketing campaigns.”

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The company’s top-line and bottom-line results were mixed compared to analysts’ expectations. Revenue was $7.9 billion and earnings were $1.07 per share, according to Wall Street data. Yahoo Finance.

PayPal’s total payments rose 9% year-over-year to $422.6 billion in the quarter, driven by a 0.9% increase in active accounts to 432 million and an 8.5% increase in payment transactions per active account to 61.4.

In the fourth quarter, PayPal said it expects low-single-digit revenue growth and a low- to mid-single-digit revenue decline. And for the full year, income growth is now expected to be in the mid-teens, compared to the previous forecast of low-to-moderate growth.

“We are raising our non-GAAP guidance for the full year and are pleased to see strength in the business,” Criss said. “Over the past year, we have built a strong foundation that will serve us well in the years to come.”

Is PayPal stock a buy, sell or hold?

In early trading Tuesday, PayPal was up 36% year-to-date, easily outpacing the S&P 500’s 23.5% total return (price change plus dividends). And most of Wall Street thinks so financial stock has more room to run.

According to S&P Global Market Intelligencethe average analyst price target for PYPL stock is $85.58. US, which means an estimated upside potential of around 10% from current levels. In addition, the consensus recommendation is “Buy”.

But not everyone goes all-in big stocks. Financial services firm Morgan Stanley has an equal rating (equivalent to hold) on PYPL with a price target of $71.

“PayPal’s huge lead in online adoption and low industry lag could support growth consistent with overall e-commerce,” a Morgan Stanley analyst wrote. James Fawcett in a note dated October 24. “Improving operating efficiency along with ongoing share buybacks could also contribute to earnings per share growth for Teens.

However, Fawcett expresses concern about PayPal’s strategic direction, citing slow progress in improving Branded Checkout, doubts about Venmo’s monetization potential among Gen Z and Y shoppers, and uncertainty about the company’s investment priorities and ability to execute on key strategies.