The actions of PayPal they plummeted 12.7% on Wall Street this Tuesday, May 9, despite the fact that on Monday it presented the financial results of the first quarter with profits. However, investors were wary of the numbers.
PayPal reported first-quarter revenue of $7.04 billion in its financial results, up 9% year-over-year. Revenue topped the Wall Street consensus estimate of $6.98 billion, according to data from Benzinga Pro.
The company reported earnings per share of $1.17 for the first quarter, beating an analyst estimate of $1.10.
Total payment volume for the first quarter was $354.5 billion, indicating an increase of 10% year-over-year. Payment transactions totaled $5.8 billion, up 13% year-on-year. The company ended the first quarter with 433 million total active accounts, an increase of 1% year-over-year.
“PayPal got off to a very good start in 2023 and delivered better than expected performance in the first quarter. We’re working hard to continually improve our already popular digital wallet and payment experiences, and it’s starting to pay off. We are confident in our momentum and are raising our full-year earnings per share forecast as a result.”, affirmed the CEO of PayPal, Dan Schulmann.
However, it was not enough
Why did investors distrust?
Despite these good results, the The company cut its outlook for annual adjusted operating margin, eclipsing its profit growth forecast.
PayPal expects adjusted operating margin expansion of 100 basis points this year, compared with its previous forecast of 125 basis point growth.
Investors are assuming the company’s branded pay button, a high-margin business, isn’t doing as well as people thought and the fear is that they are losing market share to Apple, Dan Dolev told Reuters. , Mizuho analyst, explaining PayPal’s stock drop.
The high interest rate environment has also begun to discourage big-ticket purchases as buyers find themselves deeper in debt, particularly lower-income customers, analysts said.
Source: Ambito
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