On Tuesday, PayPal Holdings Inc. (NASDAQ:PYPL) shares plummeted more than 12% after announcing its most recent quarterly results. The company reported its fiscal third-quarter revenue and earnings Monday after markets closed, beating the consensus for analyst expectations.
However, the fintech giant issued cautious guidance for FQ4 revenue and earnings. As a result, analysts revised their PYPL price targets downward to factor in the soft guidance.
PayPal posted FQ3 non-GAAP earnings per share of $1.11, beating the average for analyst estimates of $1.08, while its Q3 revenue of $6.18 billion missed the consensus Street forecast of $6.23, despite rising by 13% from the same quarter in 2020.
PayPal also issued FQ4 revenue guidance in the range of $6.85 billion to $6.95 billion, significantly below the Street forecast of $7.24 billion. Its EPS guidance of about $1.12 also fell short of the average analyst estimate of $1.27.
Is PayPal a good buy in November?
From an investment perspective, PayPal shares trade at a steep P/E ratio of 49.28 and a reasonable P/E of 34.32, making it an interesting choice for value investors.
However, when you factor in its earnings growth prospects of about 71% this year and an average of 24% per year over the next five years, it becomes an exciting opportunity for long-term investors.
Source – TradingView
Technically, Apple shares seem to have recently plummeted to complete a downward breakout from a descending channel formation. As a result, the stock has fallen to the oversold conditions of the 14-day RSI, thus creating a perfect opportunity for a rebound.
Therefore, although the company issued cautious guidance for the holiday season quarter, the prospects of outperforming the guidance could be a catalyst for the rebound.
Investors could target profits at about $212.38, or higher at $222.81, while $192.49 and $181.15 are crucial support levels.
Is the pullback an opportunity to buy?
In summary, PayPal’s recent pullback comes ahead of a busy holiday season, making it an attractive opportunity to buy.
Therefore, with shares trading at reasonable valuation multiples, it could be time to add to your stake.
The post Should you buy or sell PayPal stock as analysts cut the price target on weak guidance? appeared first on Invezz.
