PayPal’s first-quarter 2022 earnings report is scheduled to be released today after market close. This guide will predict the company’s first-quarter earnings report based on the company’s last quarterly report. PayPal announced its fourth-quarter profits for 2021 on February 1, 2022. For the first time, the business exceeded $1 trillion in annual TPV, concluding the year with $1.25 trillion in total payment volume. Additionally, it handled 5.3 billion transactions in the fourth quarter, a 21% increase over the previous quarter.
The firm gained 49 million customer accounts throughout the year, bringing the total to 426 million at the end of the year. The engagement metric of transactions per active account climbed by 11%, a 10% increase over 2020 [1].The average number of transactions per active account has grown to 45 this year, an increase of 11% compared to last year’s $5.4 billion in annual free cash flow. In the fourth quarter, total payment volume climbed by 23% to $340 billion.
In the third quarter, eBay volumes decreased 45% to 2.7% of total sales, down from 6% the previous year. Volumes climbed by 28% on a currency-neutral basis when eBay was excluded. In the fourth quarter, revenue increased 13% to $6.9 billion [2]. “We still have the eBay transfer to complete. This change obscures some of the business’s inherent strength,” Dan Schulman, CEO of PayPal, said [3].He noted that eBay presented $1.4 billion in sales last year, and that amount should be closer to $600 million this year. By the third quarter, PayPal will no longer be required to adjust its eBay results.
Cross-border volumes and small company merchants were disproportionately affected by supply chain issues, with inflation affecting expenditures in some parts of PayPal’s customer base.
Growing COVID variant risks resulted in a decline in travel and event bookings, and the government stimulus cut had an impact as well. Despite a solid two-year growth rate of more than 50%, e-commerce growth rates were lower than industry predictions over the Christmas season.
Quarter 1 2022 sales expectations range between 6.3 billion and 6.5 billion dollars, with an average of 6.4 billion dollars. Earnings per share projections for Quarter 1 2022 vary from 0.82 cents to 0.97 cents, with a mean expectation of 0.88 cents.
Source: money.cnn
Additionally, PayPal said that it intends to add between 15 million and 20 million new accounts this year, reducing its earlier target of 750 million total accounts.PayPal anticipates revenue growth of 15% to 17% in 2022 on a spot and foreign-currency-neutral basis. Analysts forecast a 17.9% year-over-year growth in revenue in 2022 [4].
PayPal Stock Analysis
PayPal (PYPL) has been declining since the beginning of the year. The stock has fallen more than 56% so far. PYPL is now trading at 87.03, having just broken below the weekly inside bar. On the daily chart, the price is far below the 100-day moving average, and the MACD is trending downward, indicating a negative trend.
PYPL’s next resistance level is around 107.59. That happens to be an imbalance. If it breaks through this level, the stock may go towards 115.17. On the other side, the stock’s support level is located at about 81.39. If the price breaks through this level, it may continue to fall toward 68.81 [5].
- https://s1.q4cdn.com/633035571/files/doc_financials/2021/q4/Q4-FY-21-PayPal-Earnings-Release.pdf
- https://s1.q4cdn.com/633035571/files/doc_financials/2021/q4/Q4-FY-21-PayPal-Earnings-Release.pdf
- https://www.cnbc.com/2022/02/01/paypal-pypl-q4-2021-earnings.html
- https://s1.q4cdn.com/633035571/files/doc_financials/2021/q4/Q4-FY-21-PayPal-Earnings-Release.pdf
- https://finance.yahoo.com/quote/PYPL/chart
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Adnan Rehman
Market Analyst
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