Shares of PayPal fell nearly 17% on Wednesday as investors questioned the company’s growth prospects after the company disclosed a major revenue impact from the imminent loss of eBay Inc customers.
The stock slide gives stocks their lowest open since May 2020, like PayPal also listed several other factors affecting its performance, including high inflation, the end of stimulus checks, and the impact of ongoing supply chain issues on cross-border volumes. gender.
At least 11 analysts have slashed their price targets on the stock, and BTIG downgraded its recommendation to “neutral” from “buy”.
PayPal Operating Agreement with eBayits former parent company, has ended, and the transition of the online marketplace to its own payment platform is affecting trading volumes, the company said on Tuesday.
CEO Dan Schulman said in a conference call with analysts that eBay’s transition is expected to pressure revenue to $600 million (about Rs 4,490) in the first half. this year.
“Taken together, supply chain management issues, inflationary pressures on low-income customer spending, and a continued decline in eBay volume created difficult headwinds out of Q4.” /21 will last at least through 1H/22,” Evercore ISI analysts wrote in a note.
PayPal predicts revenue will grow 6% in the current quarter, well below the 11.7% growth analysts estimated, according to IBES data from Refinitiv.
PayPal said e-commerce growth during the holiday season was below industry expectations.
“We think the modestly weaker-than-expected results over the past few quarters have been largely due to uneven/disappointing E-Commerce growth.” Morgan Stanley the analyst wrote in a note.
© Thomson Reuters 2022
