PayPal Stock Dips Despite Strong Q4 Earnings—What’s Happening?
Alright, let’s talk about PayPal’s latest earnings report and why the stock is taking a hit despite some pretty solid numbers.
So, PayPal just released its Q4 results, and on paper, things look good. The company reported earnings per share (EPS) of $1.19 , beating analysts' expectations of $1.12 . Revenue also came in strong at $8.37 billion , surpassing the estimated $8.26 billion . Even Venmo, one of PayPal’s most popular services, saw a 10% growth in total payment volume. Sounds great, right?
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But here’s the catch— the stock still dropped over 9% in early trading . Why? Investors are concerned about slowing growth in key areas, particularly in unbranded payment volume. This refers to transactions PayPal processes for businesses outside its own platform, and this segment saw a steep decline from 29% a year ago to just 2% in Q4.
Another issue? Margins. PayPal’s take rate , which is the percentage it makes on transactions, dipped from 1.96% to 1.91% . While the transaction margin improved slightly to 47% , it seems like Wall Street is looking for stronger signs of profitability.
Now, PayPal isn’t just sitting back. CEO Alex Chriss is actively working on a turnaround. The company recently cut its workforce by 10% and is making big investments in AI and automation to drive efficiency. They’ve also launched new features like Fastlane, a one-click checkout option meant to compete with Apple Pay and Shop Pay.
On top of that, PayPal announced a massive $15 billion share buyback program , with $6 billion planned for 2025. That’s a strong signal of confidence from the company.
Looking ahead, PayPal is projecting earnings of $4.95 to $5.10 per share for 2025 , beating Wall Street’s $4.90 estimate. So despite the short-term selloff, long-term investors might still see potential here.
The big question now—can PayPal successfully boost margins and reignite growth? It’ll be interesting to watch how Chriss’ strategy plays out in the coming months.
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