PayPal stock price forecast ahead of earnings: Buy, sell, hold?

PayPal (NASDAQ: PYPL) stock price has staged a strong recovery in the past few weeks as investors buy the company’s dip. The shares jumped to a high of $76 on Monday, the highest level since May 8th. It has surged by more than 29% above the lowest level this year.

PayPal earnings preview

PayPal share price has faced numerous headwinds in the past few years. After surging to $309 during the pandemic, the stock plunged to $58 earlier this year. This decline happened as concerns about the company’s growth started fading.

Still, PayPal’s fundamentals are strong. The most recent earnings showed that the company had over 425 million active customers and over 32 million merchants. It is also seeing strong growth in its Buy Now Pay Later (BNPL) product.

The next important PayPal news will be the company’s earnings scheduled for Wednesday this week. Analysts expect that PayPal’s revenue rose to $7.2 billion in the second quarter from the previous $7.04 billion. The company made $6.8 billion in the same quarter in 2022.

They also expect that the GAAP earnings per share will come in at 82 cents. PayPal has a strong track record of outperforming analysts expectations. Most importantly, other fintech companies have posted strong results recently. As we noted here, SoFi published strong results this week as demand for its products rose.

Today’s PayPal is different from what we had a few years ago. For one, the company is now intensifying its focus on profits instead of growth at all cost. And in this regard, PayPal has become highly profitable. Its annual profit has jumped to over $2.7 billion, up from $2.0 billion in 2019. Also, its revenue per share has jumped from $13 to $24.

PayPal stock price forecast

The daily chart shows that the PYPL share price has staged a strong comeback in the past few weeks. In this comeback, the shares have moved from the year-to-date low of $59.27 to a high of $75.82. Along the way, the stock has flipped the important resistance level at $71.63 into support.

PayPal share price has jumped above the 25-day and 50-day exponential moving averages while the MACD has jumped above the neutral point. Therefore, the outlook for the shares is bullish, with the next level to watch being $80.