PayPal (NASDAQ:PYPL) Shares Gap Up – Time to Buy?

PayPal Holdings, Inc. (NASDAQ:PYPL) gapped up prior to trading on Wednesday . The stock had previously closed at $47.37, but opened at $54.85. PayPal shares last traded at $54.7720, with a volume of 31,831,140 shares changing hands.

Key PayPal News

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: Stripe and Advent reportedly offered to buy PayPal for $60.50 per share, creating a takeover premium that has sent PYPL sharply higher. Reuters report on Stripe and Advent offer
• Positive Sentiment: The reported deal would value PayPal at more than $53 billion and is supported by roughly $50 billion in committed financing, increasing the credibility of the bid. PYMNTS report on the bid
• Neutral Sentiment: PayPal has not publicly responded to the approach yet, so the situation remains preliminary and could still change materially. Yahoo Finance report on the offer
• Neutral Sentiment: Analyst and commentary pieces suggest the rumored offer may not fully reflect PayPal’s longer-term value, which could complicate any deal process. Seeking Alpha analysis

Wall Street Analysts Forecast Growth

Several research firms have recently commented on PYPL. Loop Capital began coverage on PayPal in a research report on Tuesday, March 31st. They set a “hold” rating and a $46.00 price target for the company. BMO Capital Markets assumed coverage on PayPal in a research note on Tuesday, April 21st. They set a “market perform” rating and a $52.00 target price on the stock. Needham & Company LLC reissued a “hold” rating on shares of PayPal in a research note on Tuesday, May 5th. UBS Group raised their target price on PayPal from $44.00 to $48.00 and gave the company a “neutral” rating in a report on Wednesday, May 6th. Finally, Piper Sandler dropped their target price on PayPal from $46.00 to $42.00 and set a “neutral” rating for the company in a research report on Monday, June 29th. Seven investment analysts have rated the stock with a Buy rating, thirty-two have issued a Hold rating and six have assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus price target of $53.91.

PayPal Trading Up 17.2%

The company’s 50 day simple moving average is $43.98 and its 200 day simple moving average is $47.22. The company has a debt-to-equity ratio of 0.47, a current ratio of 1.26 and a quick ratio of 1.26. The firm has a market cap of $48.96 billion, a price-to-earnings ratio of 10.43, a P/E/G ratio of 1.19 and a beta of 1.33.

PayPal (NASDAQ:PYPL) last announced its quarterly earnings data on Tuesday, May 5th. The credit services provider reported $1.34 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.27 by $0.07. The business had revenue of $8.35 billion for the quarter, compared to analysts’ expectations of $8.05 billion. PayPal had a return on equity of 25.02% and a net margin of 15.00%.The company’s revenue for the quarter was up 7.2% compared to the same quarter last year. During the same period last year, the firm earned $1.33 earnings per share. As a group, research analysts expect that PayPal Holdings, Inc. will post 5.32 earnings per share for the current fiscal year.

PayPal Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Thursday, June 25th. Shareholders of record on Thursday, June 4th were issued a dividend of $0.14 per share. The ex-dividend date was Thursday, June 4th. This represents a $0.56 annualized dividend and a yield of 1.0%. PayPal’s dividend payout ratio is 10.51%.

Insider Buying and Selling at PayPal

In other news, CAO Chris Natali sold 1,337 shares of the business’s stock in a transaction dated Wednesday, April 29th. The stock was sold at an average price of $49.46, for a total transaction of $66,128.02. Following the completion of the transaction, the chief accounting officer directly owned 1,586 shares of the company’s stock, valued at approximately $78,443.56. The trade was a 45.74% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Suzan Kereere sold 3,379 shares of the company’s stock in a transaction that occurred on Wednesday, June 3rd. The stock was sold at an average price of $42.79, for a total transaction of $144,587.41. Following the sale, the insider owned 30,983 shares in the company, valued at $1,325,762.57. The trade was a 9.83% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 20,612 shares of company stock valued at $966,623 in the last quarter. Corporate insiders own 0.63% of the company’s stock.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in the company. Bard Associates Inc. acquired a new stake in shares of PayPal in the 4th quarter valued at $25,000. Allied Private Wealth LLC purchased a new position in PayPal in the second quarter valued at $25,000. Robinswood Financial LLC purchased a new position in PayPal in the first quarter valued at $26,000. Caitong International Asset Management Co. Ltd raised its stake in PayPal by 15,233.3% in the fourth quarter. Caitong International Asset Management Co. Ltd now owns 460 shares of the credit services provider’s stock valued at $27,000 after buying an additional 457 shares in the last quarter. Finally, Safe Harbor Fiduciary LLC acquired a new stake in PayPal in the fourth quarter valued at $28,000. Hedge funds and other institutional investors own 68.32% of the company’s stock.

PayPal Company Profile

PayPal Holdings, Inc operates a global digital payments platform that enables consumers and merchants to send and receive payments online, on mobile devices and at the point of sale. The company provides a broad set of payment solutions, including a digital wallet, merchant payment processing, checkout services, invoicing and fraud-management tools. PayPal’s platform is designed to support e-commerce, in-person retail and person-to-person transfers, targeting both individual consumers and businesses of varying sizes.

Key products and services in PayPal’s portfolio include the PayPal wallet and checkout ecosystem, the Venmo peer-to-peer mobile app, Braintree’s developer-focused payment gateway, Xoom for international money transfers, and PayPal Credit and buy-now-pay-later options.