What’s next for PayPal stock after its CEO announced retirement?

By:
on Feb 10, 2023
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  • PayPal reports Q4 results and issues guidance for the future.
  • CEO Dan Schulman says he'll retire by the end of this year.
  • Macquarie Capital analyst shares his outlook on PayPal stock.

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PayPal Holdings Inc (NASDAQ: PYPL) is in focus on Friday after the digital payments giant reported better-than-expected profit for its fiscal fourth quarter.

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Should you buy PayPal stock?

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The multinational is now calling for $4.87 of adjusted per-share earnings this year that also topped $4.79 a share that experts had forecast. Still, Macquarie Capital’s Paul Golding said on Yahoo Finance:

With some new entrants, or maybe not so new, but scaled entrants that are gaining recognition and penetration in the marketplace, this may not be as clear cut a story. Even on the call, mgmt. was a bit downbeat on eCommerce backdrop.

He did, however, stock to his outperform rating on the PayPal stock. Golding’s new price target of $115 still represents about a 50% upside from here.

CEO Dan Schulman is retiring

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More importantly, CEO Dan Schulman announced plans of stepping down by the end of the current year. He will, however, remain on the company’s board. PayPal is yet to announce a successor. Golding added:

Given where PayPal finds itself right now, they need an innovator and a visionary to not just ensure that PayPal retains its place in the market, but to provide a compelling offering to go into new channels and new markets.

For the year, PayPal stock is currently up roughly 5.0%.

PayPal adds 2.9 million new accounts

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Last month, PayPal revealed plans of lowering its headcount by about 7.0%. Costs related to restructuring, it said last night, would result in about a $100 million charge in Q1.

Net new adds were 2.9 million in the recent quarter. PayPal now has 435 million total active accounts – up 2.0% for the year. Golding also said:

BNPL is a space where they were not the incumbent. So, to note that they drove $20 billion of volume on BNPL on fiscal 2022 across 30 million customers is a significant achievement.

Notable figures in PayPal’s earnings print

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  • Earned $921 million versus the year-ago $801 million
  • Per-share earnings climbed from 68 cents to 81 cents
  • Adjusted EPS printed at $1.24 as per the press release
  • Revenue jumped 7.0% year-on-year to $7.38 billion
  • Consensus was $1.20 of EPS on $7.39 billion revenue
  • $357.4 billion of TPV was slightly below estimates
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