On Wednesday, October 28, PayPal Holdings, Inc. (NASDAQ: PYPL) announced its third quarter 2015 financial results. The PayPal EPS number of $0.31 beat Wall Street analyst consensus estimates of $0.29, according to Yahoo! Finance. PayPal also reported $2.26 billion in gross revenue, up 19 percent year-over-year.
Other highlights from the PayPal report included a 10 percent year-over-year increase in customer accounts to 173 million and an average number of transactions per account of 27, up 12 percent year-over-year. PayPal processed 1.22 billion transactions in the third quarter of 2015.
PYPL EPS estimates have been increased marginally over the past 90 days. PYPL EPS of $0.34 is the consensus for the fourth quarter of 2015. Thirty-six cents is the consensus for the first quarter of 2016. Full-year PYPL EPS of $1.26 is expected in 2015, growing 19.0 percent to $1.50 in 2016.
Year-over-year PYPL EPS growth comparisons aren’t available for the third and fourth quarters of 2015 because the company just went public in the second quarter. EPS growth for the full 2015-year is expected to amount to 270.6 percent, had the company been public in 2014. Annual EPS growth of 16.8 percent is forecast by analysts for PYPL shares over the coming five years.
The Wall Street consensus for full-year 2015 PayPal sales is $9.20 billion. That figure is expected to grow by 16.1 percent to $10.68 billion in 2016.
PayPal is completely debt-free and reports an operating margin of 16.3 percent and a profit margin of 12.9 percent. PayPay also reports that it holds $4.3 billion in cash.
Top institutional holders of PYPL shares include Harding Loevner, LLC.; Vontobel Asset Management, Inc.; UBS Global Asset Management Americas, Inc.; and Fundsmith, LLP.
When the shares of PayPal, PYPL, were first spun-out from eBay shares on July 20, as reported by the Inquisitr, they traded as high as $42.55 before backing off. Shares traded briefly as low as $30 during the August market turmoil, before recovering quickly to close the day at $34.25.
On September 29, the market took PYPL shares down to $30.30 before they were defended again, and bought back up, in what is now amounting a series of higher highs and higher lows, to the Friday close of $36.01.
Noteworthy was the reaction of the market to earnings, during the regular session on Thursday. Shares initially traded down, and printed the day’s low early, before being defended, much as they were on September 29.
Since the September 29 bottom, PYPL shares have made short term highs of $33.02, $35.05, and $36.65: higher with each return. Likewise, since September 29, PYPL shares’ short term lows have been $31.09, $32.88, and $34.50.
Additionally, a seeming regime change can bee seen with PYPL stock trading since the September 29 low. Thursday’s strong move off the morning lows suggests institutional accumulation. PYPL share trading volume subsided from Thursday’s levels on Friday, but was still about 30 percent above average. The price increased by 0.28 percent on Friday as well.
Looking back at PYPL share trading since the July IPO, only three major resistance points sit between PYPL shares and all-time price highs. The most recent high of $36.65 represents a significant level of resistance. Others include the August 18 high of $39.00, the August 4 high of $39.91, and PYPL shares’ all-time high reached the first day of trading, July 20, at $42.55.
Thirty stock brokers provide price targets for PYPL stock. Currently, the targets range from $23.00 to $50.00 and average $42.67. The mean PYPL stock recommendation from the brokers is 2.1, where 1.0 is a strong buy and 5.0 is a sell. Since early August, new recommendations to “buy” have been made by Topeka Capital Markets, Canaccord Genuity, and Argus.
PayPal is ranked 13th in the Investor’s Business Daily “Finance-CrdtCard/PmtPr Group” and carries an EPS rating of 94 out of 100. PYPL shares also carry an “A” Sales+Profit Margin+Return on Equity, “SMR,” rating from IBD. The top-rated company in the group is Vantiv, Inc. (NYSE: VNTV). VNTV shares are up 65.1 percent over the past 12 months. VNTV EPS growth is seen at 18.9 percent in the fourth quarter of 2015. Vantiv has a debt-to-equity ratio of 245.6 percent.
[Feature Photo by Spencer Platt/Getty Images]