By Dhirendra Tripathi
Investing.com – PayPal stock (NASDAQ:PYPL) plummeted more than 12% Tuesday as the payments company lowered its outlook for sales and the volumes it will process during the year.
Third-quarter performance suffered as transactions tied to eBay's (NASDAQ:EBAY) marketplace slid 45%, according to a statement by PayPal. That led to the company missing analysts’ forecast for third-quarter sales. A raft of downgrades followed.
PayPal now expects 2021 revenue to grow by around 18% to $25.35 billion at the midpoint, compared to around 20% growth the firm had guided earlier.
It also lowered the top end of its growth forecast for total payment volumes processed to 34% from 35% earlier. It kept the lower end of around 33% growth unchanged.
Ebay’s share of PayPal’s TPV more than halved to 3%. This loss was expected since the two decided to end their longtime partnership in 2018 but the pace of decline may hold a surprise for the payments company.
Chief Executive Officer Dan Schulman attempted to paint the company’s agreement with Amazon (NASDAQ:AMZN) as the next big thing. The company said the tie-up will enable Venmo’s 80+ million users in the U.S. to pay with Venmo on Amazon starting next year.
Net revenue in the third quarter rose 13%, to $6.18 billion. Profit per share of $1.11 was higher than estimates.
Piper Sandler lowered the price target for PayPal shares to $280. Truist Securities sees them at $200. Deutsche, RBC and Rosenblatt also lowered their targets. The stock touched a low of $200.83 so far in the session.