PayPal Stock Plummets to 2-Year Low After Poor Forecast

A deluge of bear notes rolled in after earnings

Deputy Editor
Feb 2, 2022 at 10:24 AM
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PayPal Holdings Inc (NASDAQ:PYPL) stock is spiraling today, last seen down 25.8% to trade at $130.49, after the company missed bottom-line estimates and issued a weaker-than-expected current-quarter forecast. The payment services staple reported fourth-quarter earnings of $1.11, missing Wall Street's expectations by a penny, alongside a revenue beat. Weighing on PayPal stock is an ongoing transition from former parent company eBay (EBAY), which is moving to other forms of payment.

Analysts were quick to respond to the event, with downgrades from Raymond James to "market perform" from "outperform," and BTIG to "neutral" from "buy." No fewer than 17 other analysts slashed their price targets as well, with the lowest from Jefferies to $145 from $200. 

The last time we checked in on the security, the majority of covering brokerages were bullish, following a bull note from BMO. Not much has changed in the interim, with 25 of now 29 recommending a "buy" or better, leaving ample room for addition price-target cuts/downgrades going forward.

Unsurprisingly, options traders are rushing PYPL, as well. At last check, 92,000 calls and 87,000 puts have exchanged hands, which is 12 times the average intraday amount. Most popular is the weekly 2/4 130-strike put, followed by the 120-strike put from the same series, with new positions being sold to open at each.

On the charts, PayPal stock is trading at a two-year low, as the equity paces for its worst single-day percentage drop in more than two years. Fresh removed from its seventh-straight monthly drop, PYPL is down 45.8% year-over-year.

 

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