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PayPal Holdings, Inc. (PYPL) Stock on a Sharp Decline, Here’s the Reason

PayPal Holdings, Inc. (PYPL), a technology platform and digital payments company, has plunged 17.92% in aftermarket trading session. Consequently, it is trading at $144.30 at the time of the writing. During Tuesday’s regular trading session, PYPL gained an increase of 2.24% and closed the day at $175.80. The plunge in aftermarket could be attributed to abysmal earnings for the fourth quarter and full-year 2021 results.

PYPL Q4 2021 Results

Late on Tuesday, PYPL released the results for the fourth quarter of the fiscal year 2021. The quarter ended on 31st December 2021. PayPal generated net revenue of $6.9 billion during the quarter against $6.1 billion for the same quarter of 2020. The total operating expenses for the period stood at $5.8 billion against $5.1 billion for the same period of 2020. The net income generated by the company during three months was $801 million (or net income of $0.68 per basic and diluted share) against the net income of $1.5 billion (or net income of $1.34 and $1.32 per basic and diluted share) for the same three month period of 2020.

FY2021 Results

Alongside, PYPL also released the results for full-year 2021. The net revenue for the year stood at $25.3 billion against $21.4 billion during the previous year. The total operating income generated by the company during fiscal 2021 was $4.2 billion against $3.2 billion for the fiscal year 2020. The net income generated by the company during the twelve-month period was $4.1 billion (or net income of $3.55 and $3.52 per basic and diluted share) against $4.2 billion (or the net income of $3.58 and $3.54 per basic and diluted share) for the fiscal year 2020.

Financial Guidance for Q1 and FY2022

PYPL also released the financial guidance for the upcoming quarter and for the fiscal year 2022. The company expected the revenue to grow at approximately 6% on a spot and FXN basis during the first quarter of 2022. The GAAP earnings per diluted share are expected to stand at $0.50, while the non-GAAP earnings per diluted share are expected to remain at $0.87 during the first quarter of the fiscal year 2022. For the complete year 2022, the company expects the revenue to grow in the range of 15% to 17%. The GAAP earnings per diluted share are expected to be in the range of $2.97 to $3.15, while in the case of non-GAAP, it is expected to remain in the range of $4.60 to $4.75 for the full year of 2022.

Future Outlook for PYPL

According to statistics, during the last three months, PYPL stock has declined by approximately 23%. Looking ahead, the analysts believe that even though the stock holds several positive signals, these are not enough to be considered it as a buy candidate; hence, it should be considered as a hold candidate at this point in time while waiting for further developments.

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