PayPal yesterday presented its quarterly results, which reflected earnings per share of 1.11 dollars, somewhat below expectations, and revenues of 6,920 million dollars, above expectations. Nothing out of the ordinary, which did not presage the poor results that the company had on the stock market just a few hours later, when its shares lost 24% of their value. What has happened for PayPal to hit such a bump in the stock market? Very simple: the forecasts offered by the company for the current quarter are not too good, blame according to its directors, in part, of inflation.
For these first three months of the year, PayPal expects to have earnings per share of 0.87 dollars, compared to the 1.16 expected. Furthermore, it forecasts its revenue growth to be between 15% and 17% for the full year of 2022. Again, less than expected. That did not please the shareholders at all, who have given the company a very severe setback on the stock market.
In addition to the forecasts, the shareholders were not very satisfied with the growth data for the past quarter. They were not fulfilled, in part to the 4.5 million illegitimate accounts that joined the platform, which according to the PayPal CFO John Raineyaffected their ability «to get the forecasts for the quarter«. In addition, they also failed to meet their user growth goals, which according to Rainery they chose to focus instead on a “sustainable growth and a boost of interaction«.
Dan Schulman, CEO of PayPalgave an interview to CNBC, in which he assured that the company decided to take a measured approach with respect to forecasts, but expects revenue to accelerate its growth again in the second half of the year.
In addition, Schulman pointed to the transition from the company’s previous owner, eBay, to its own payment platform as the main obstacles to getting better forecasts for this quarter. Also to factors unrelated to the company, such as the aforementioned inflation, which has lowered consumer spending, and the problems of the supply chain, which according to him «has had a disproportionate impact» in cross-border payments.
