No company is experiencing a direct line to the top. This statement is especially true for the technology names, and PayPal holdings Inc (Nasdaq:PYPL) to find it the hard way. On the eve of the first quarter report of revenues 2018, PYPL stock dipped more than 4%. Hardly the type of performance you want to see going into earnings.
Two weeks ago I warned readers that the stock PayPal was due for a correction, or at least a correction. We’ve all heard the phrase “the dollar is estimated V.” This is a concept that relates to each investment class, but Tech firms are known to be very vulnerable. With these names create sexy headlines, they get a huge wave of mood.
Obviously, it’s great if you catch them at the right time. Unfortunately, being caught at the wrong end may lead to significant damage.
So that a sudden loss of heading in terms of earnings? On paper, probably not so much. Because the exhaust of eBay (US:eBay), PYPL or has reached or exceeded earnings per share expectations. I don’t expect anything else in the 1st quarter. History performance does not justify to be the opposite.
Besides, I’m long-term bullish on the stock PYPL. Given the unstable market conditions, you want to shift your portfolio towards companies that have a future. I can only think of a few organizations that rival PayPal.
If cryptocurrency and the excitement around them has something proved that more and more people are willing to pay and financial alternatives. For PYPL, you should love the broad sentiment towards alternative payment systems.
So for me it’s not about whether stocks PayPal hits or misses. Instead, the K1 can produce quite an impressive result?
PYPL has to convince the markets for the 1st quarter report
For the upcoming 1st quarter earnings report, forecast peg PYPL stock to hit earnings per share of 54 cents. It is not surprising that this figure is on the higher end of the rating spectrum, which ranges from 49 cents to 57 cents. Against the previous year, the consensus by almost 23% higher than in the 1st quarter 2017 actual data.
Although this is a small example, historically speaking, PayPal provides good results in the 1st quarter. Starting from fiscal 2015, a digital payments processor has met the expectations of EPS. Head off in 2016 and 2017, PYPL delivered revenues. The average earnings surprise for these two years amounted to 6.5%.
For the revenue part of the picture, wall Street is so optimistic. Analysts have a consensus zoned in at $ 3.6 billion. Estimate range is between $3.4 billion to $3.7 billion. In the corresponding quarter of last year, PayPal was a little less than $ 3 billion. If the company is put back, we’re talking about a 21% year-over-year growth.
As I mentioned earlier, I would not be surprised if the company’s stock has PayPal on all counts. The question really boils down to the justification of their assessments.
Between the financial years 2015 to 2017, and EPS jumped 47%. We see a similar growth in TOP-line sales, or about 42%. However, after closing at $36.71 on July 6, 2015, PYPL stock has more than doubled.
I realized: we see several names a technician to fly in less-than-ideal for a brand of poor Finance. The problem here is that we still view as PYPL responds when others know of his plays. In other words, PayPal is not fresh product. The honeymoon phase.
To recover from a major consolidation phase in the market, management must offer leadership. Meeting or slightly exceeding expectations is no longer going to cut it. Investors need something more.
How to play the stock PayPal
If you have shares in PayPal, and if the markets respond positively to K1, I would have to hold the position. However, I don’t want to go too crazy in the Addendum. Sentiment on the broader indices weak, and so I’m adopting a cautious tone.
However, if PYPL stock takes a hit, I would consider buying stock from a long-term strategy. I would be especially bullish if the shares fall, despite the company hitting its goal. That would mean the movement is based exclusively on psychology and not fundamentals.
I this year repeated, I’m bullish on the shares of PayPal in a long time. This company is Amazon.com ink. (Nasdaq:events of the week) the rising of the digital payments movement. It just happens to be stuck in a temporary lull. Just keep this in mind and use any failures to your advantage.
At the time of this writing, Josh Enomoto has long bitcoin.