PayPal Holdings (PYPL) reported its fourth-quarter earnings and revenue on Tuesday, exceeding Wall Street estimates. The digital payments firm said it expects flat to low single-digit revenue growth in the first quarter, primarily due to renegotiation efforts with subsidiary Braintree.
Braintree’s payment volume and revenue are expected to decline if customers migrate their business to other payment firms when contracts come up for renewal. This has pressured revenue growth and payment volumes, but improved transaction margins.
PayPal’s adjusted earnings rose 5% to $1.19 per share in the fourth quarter, with revenue climbing 4% to $8.37 billion. The company also announced a new $15 billion share buyback program.
Despite surpassing estimates, PayPal stock fell 6% to 84.13 in early trading, signaling a move below the 50-day line and near the bottom of a flat base. Analysts are concerned about perceived market share loss and worried that Braintree will not pivot.
The company’s focus on profitability has been evident, with CFO Jamie Miller stating that they plan to continue guiding revenue one quarter at a time. PayPal also announced an investor day on Feb. 25, where it will discuss its transformation strategy.
Overall, PayPal’s strong earnings report is tempered by concerns about Braintree’s performance and potential market share loss. The company’s stock price may face further volatility in the near term as investors weigh these factors.
Source: https://www.investors.com/news/technology/paypal-stock-paypal-earnings-q42024