Digital payments platform PayPal (NASDAQ: PYPL) will be reporting earnings this Tuesday before the bell. Here’s what to look for.
PayPal missed analysts’ revenue expectations last quarter, reporting revenues of $8.68 billion, up 3.7% year on year. It was a slower quarter for the company, with a significant miss of analysts’ EPS estimates and a slight miss of analysts’ revenue estimates.
Is PayPal a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting PayPal’s revenue to grow 3.3% year on year, improving from the 1.2% increase it recorded in the same quarter last year.
Heading into earnings, analysts covering the company have grown increasingly bearish with revenue estimates seeing in majority downward revisions over the last 30 days. PayPal has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at PayPal’s peers in the diversified financial services segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Euronet Worldwide delivered year-on-year revenue growth of 10.5%, beating analysts’ expectations by 4.3%, and WEX reported revenues up 5.8%, in line with consensus estimates. Euronet Worldwide traded down 4.4% following the results while WEX was also down 16.3%.
Read our full analysis of Euronet Worldwide’s results here and WEX’s results here.
There has been positive sentiment among investors in the diversified financial services segment, with share prices up 8.8% on average over the last month. PayPal is up 11% during the same time and is heading into earnings with an average analyst price target of $52.97 (compared to the current share price of $50.49).
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