PayPal Holdings (PYPL) is on track to close its seventh consecutive trading session in the red amid mounting concerns related to branded checkout growth.
The stock was trading 2.40% lower from its previous close at $58.66 as of Thursday afternoon.
The San Jose, California-based payments company boosted its full-year guidance after Q3 earnings topped the consensus estimate by a handy margin, but issued Q4 earnings on the light side.
During its third quarter, total payment volume topped Wall Street expectations, but the number of active users barely increased.
“Branded experiences TPV grew 8% on a currency-neutral basis in the quarter. This includes PayPal; buy now, pay later; Venmo and our debit card programs and is the single most important metric to track the progress on transformation from an online payments company to a commerce company,” PayPal CEO had said during the third quarter earnings call.
“We reached 10% branded experiences volume growth in the U.S., more than double our growth the same quarter a year ago,” the CEO had said.
However, the stock closed the following day 4.57% lower at $69.68.
“We called out sort of mid-Q3 that we started to see a slowdown on consumers, particularly around discretionary spending, retail and really in middle to low income brackets, which we are — play a significant role in PayPal,” the CEO said yesterday during Citi’s 14th Annual FinTech Conference.
“What we’ve seen so far is that there’s a lot of pressure on consumer right now. This is across U.S. and Europe, and it has persisted into Q4. And we expect that to have an impact on branded checkout,” added the CEO.
“I still expect branded checkout in Q4 to grow but grow slower than Q3 if this persists,” said the CEO.
PYPL stock has lost 11.29% over the course of the last six trading days. A significant pullback was logged on Thursday, November 13, and the day after.
The stock declined 2.78% on Thursday to close at $65.33 after its presentation at the KBW Fintech Payments Conference. PYPL retreated further the following day, with the stock logging a drop of 3.86% to finish at $62.81.
The Wall Street community as well as Seeking Alpha authors see the stock as Buy.
“The company’s initiatives in agentic commerce may help provide a catalyst for accelerating growth. I reiterate my strong buy rating for the stock,” noted SA contributor Julian Lin.
Meanwhile, the Quant Rating system grades the stock as Hold, with a score of 3.32 on a scale of 5. The quantitative measuring system assigns PYPL a grade of D- for Valuation and Momentum, C for Growth, A for Profitability, and B- for Revisions.