PayPal Stock tries to put the ground

Shares of digital payment platform PayPal, Inc. (NASDAQ: PYPL) fell (-62%) on the year and returned to below their 2020 pandemic lows. accelerated growth during the pandemic, but now continues to see its stock deflate as it emerges from the pandemic and into a possible global recession. The macroeconomic environment has made it difficult to forecast normalized online consumer spending due to geopolitical, inflationary and supply chain pressures. This caused the company to temper its expectations by lowering its forecast. PayPal is a digital transformation aggregator for businesses and consumers as well as e-commerce. Online and peer-to-peer (P2P) payments are becoming a crowded space with competitors like Block (NYSE:SQ), Visa (NYSE:V) and Apple Pay (NASDAQ:AAPL). The company continues to grow its 429 million active user base and total payment volume. It's the Venmo (P2P) app that also continues to grow in popularity as it grows its user base north of 70 million. It is one of the few fintechs that is profitable on a GAAP basis. The Company suspended transactional services in Russia, which impacted earnings by (-$0.03) per share and enabled the sending and receiving of services in Ukraine. The company beat its best fiscal quarter of Q1 2021 with revenue growth of 7% to $6.5 billion excluding eBay (NASDAQ: EBAY). The Buy Now and Pay Later (BNPL) service increased its volume by 256% to $3.6 billion with more than 18 million customer accounts using this feature. Venmo volume increased 12% to $58 billion. PayPal plans to launch its integration with Amazon.com (NASDAQ: AMZN) in the second half. Cautious investors who have been patiently waiting for exposure in a leading digital wallet and payment platform can watch for opportunistic declines in PayPal stock.

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First Quarter 2022 Earnings Report

PayPal released its first quarter 2022 results for the three months ended March 2022 on April 27, 2021. The company reported earnings per share (EPS) of $0.88 matching analyst consensus estimates of 0.88 $, missing by (-$0.01). Revenue rose 7.7% year-over-year (YoY) to $6.50 billion, beating analyst consensus estimates of $6.41 billion. Total payment volume (TPV) increased 13% to $323 billion. The company added 2.4 million new net active accounts (NNA) or 9% to bring its total active accounts to 429 million.

Downward orientation

PayPal lowered its guidance for FY2022 EPS to range between $3.81 and $3.93 from analyst consensus estimates of $4.62. Revenue for fiscal 2022 is expected to increase 11% to 13% to $28.2 billion to $28.7 billion from $29.26 billion according to consensus analyst estimates. This includes the expected decline (-$725 million) in eBay revenue. The TPV is expected between 13% and 15%. The company plans to add 10 million ANI.

Takeaways from the conference call

PayPal CEO Dan Schulman has acknowledged taking responsibility for the lackluster results of recent quarters. Changing consumer behaviors in the face of the pandemic and the uncertain macroeconomic environment made visibility difficult. The first quarter was the strongest quarter on record with revenue growth of 31% and non-GAAP EPS growth of 84%, making it difficult to compare to the first quarter of fiscal 2022 to beat, but managed to overtake it by 7%. Not related to the transaction e...