PayPal shares plunged 18% after a weak report and forecast for 2022 year

Акции PayPal обвалились на 18% после слабого отчета и прогноза на 2022 год

1 February PayPal released its fourth quarter financial report 2021 of the year. The company reported in line with expectations, but made a weak forecast for the current quarter and 2022 year. In the post-market, shares fell by 18%, to 145 $.

results

Indicators compared to the fourth quarter 2020 years and analyst forecasts:

  • revenue - 6,92 billion dollars (+13%), forecast - 6,87 billion dollars;
  • adjusted earnings per share — 1,11 $ (+4%), forecast - 1,12 $.

PayPal's revenue growth has been slowing for several quarters. One of the reasons is the transition of Ebay to its own payment system.. Marketplace bought by PayPal in 2002 year for making payments on the site. IN 2015 the companies split, and now they are gradually ending their cooperation.

According to PayPal, inflation, that keeps consumer spending down, and problems with the supply chain also negatively affected revenue.

The growth of the user base has also slowed down.. IN 2020 year the company added 72,7 million active users, in 2021 — 48,9 million. According to PayPal, in 2022 year the number of active users will increase by 15-20 million.

Number of active users and year-on-year dynamics, million people

4к2019 305 (+14%)
1к2020 325 (+17%)
2к2020 346 (+21%)
3к2020 361 (+22%)
4к2020 377 (+24%)
1к2021 392 (+21%)
2к2021 403 (+16%)
3к2021 416 (+15%)
4к2021 426 (+13%)

305 (+14%)

Transaction volume and year-on-year dynamics, billion dollars

4к2019 199 (+22%)
1к2020 191 (+18%)
2к2020 222 (+29%)
3к2020 247 (+38%)
4к2020 277 (+39%)
1к2021 285 (+50%)
2к2021 311 (+40%)
3к2021 310 (+26%)
4к2021 340 (+23%)

199 (+22%)

Forecast

According to PayPal, in the first quarter 2022 year, adjusted earnings per share will fall by 29%, to 0,87 $. This is less than analysts' expectations in 1,16 $.

IN 2020 And 2021 years, the company's total revenue grew by 21 And 18%. According to PayPal, in 2022 year sales will grow by 15-17%. This is also less than the experts' expectations., who counted on 18%.

Promotions

PayPal is one of the beneficiaries of the pandemic. Locked-in consumers, who received money from the states, began to spend less on concerts and other travel and buy more goods in online stores. Paypal benefited from this, whose shares since February 2020 year by February 2021 grew by about 150%.

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And now PayPal's revenue growth has begun to slow down., and investors understood, that this company is overrated. So, over the past year, PayPal shares have fallen by 50% - up to the level of May 2020 of the year. As a result, over the past two years, PayPal shares have risen by only 27%. This is a lot, but for comparison: S&P 500 And Nasdaq over the same two years added 41 And 56%.

Акции PayPal обвалились на 18% после слабого отчета и прогноза на 2022 год

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