PayPal Holdings (PYPL): How Will Stock Perform After Q3 Earnings?

PayPal Holdings (PYPL) is currently on the rise after declining more than 80% from its 2021 high. Today, PayPal is trading like a leading stock again, outperforming the broad market and forming a technical bull pattern on the chart. Despite plenty of competition in the payment industry, recent innovations by PYPL have driven it to 36% growth over Q3. Based on this growth, there is growing optimism about the stock following its Q3 earnings report next week.

Currently, Paypal Stock is trading at 81.36 per share. The company has outperformed against rival payment companies on the charts, experts have said. Indeed, PayPal has shown considerable outperformance against fellow newcomers in the payments space Block (SQ), but also incumbents Visa (V) and Mastercard (MA). According to Longleaf Partners Fund, Paypal Holdings had a positive Q3, and its earnings will surely reflect that.

Longleaf Analysts Bullish On PayPal (PYPL) Stock

“Digital payments platform PayPal was a contributor for the quarter,” Longleaf’s analysts said.”The company posted solid results, with gross margin dollars growing by 8%, an improvement over the 4% increase in the previous quarter. Strong cost management also led to double-digit FCF growth, a key metric for us. The company further enhanced shareholder value by repurchasing nearly 10% of its shares on an annualized basis, leading to even stronger FCF per share growth.”

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The analysts from Longleaf also credit new Paypal CEO Alex Chriss for the positive Q3. “Much of what we envisioned at our initial investment is materializing quicker than expected, driven by the improved leadership of relatively new CEO Alex Chriss.” After the initial momentum gathered through summer, PayPal has consolidated into its most convincing pattern on the chart, sitting consistently above $80 per share.

The $82 price-per-share value will surely be tested next week as PayPal’s earnings report is published. While the stock may not see a boom as leading AI companies stocks have seen in 2024, investor confidence in PYPL is growing. Over the last three weeks, PYPL stock has formed a tight bull flag indicating higher prices may be coming soon. Furthermore, PayPal is currently trading at a significant relative discount to its historical average. At 18.2x forward earnings today, it is well below the market average and its 10-year median of 37.6x. Thus, the combined factors of bullish momentum, trading at a premium buy-in price, and a great Q3 could signal huge gains come next week.