PayPal Q2 Earnings 2022: PayPal share price rally on strong results and Elliot's $2 billion holding

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PayPal Q2 Results

PayPal, a payment-technology company, reported its Q2 earnings this week, and the firm reported stronger than expected numbers. The PayPal share price increased 9.25% on Wednesday to close at $97.92. In 2022, the share price has reduced by 50%.

Below are key highlights from PayPal's Q2 earnings:

  • Revenue: $6.81 billion, up 9% year-on-year
  • Net Income: Net loss for Q2 at $341 million or 93 cents a share
  • Active users: 429 million, up 6% year-on-year

Let us look at PayPal's Q2 numbers in detail:

PayPal Q2 Results: Revenue in beat estimates: 

PayPal reported revenue of $6.81 billion for Q2'22, higher than Street estimates of $6.79 billion. In the year-ago period, the revenue reported was $6.24 billion, up nearly 9%.

PayPal Q2 Earnings: 

PayPal reported a net loss for Q2 at $341 million or 93 cents a share. In the year-ago period, it reported a net profit of $1.18 billion. Earning of 93 cents per share (adjusted) is higher than analysts' expectation of 86 cents per share. The company plans to save $900 million in cost-cutting moves in 2022 and $1.3 billion in 2023.

PayPal Q2 2022 Payment volume: 

PayPal reported a $339.8 billion total payment volume in the second quarter, below the Street estimate of $342.83 billion. The payment volume was up 13% compared to the year-ago period. 

PayPal Q2 Results 2022: Active accounts 

At the end of the June quarter, the company had 429 million active accounts, a growth of 6% year on year. However, the number is below an estimate of 432.8 million active accounts.

PayPal Stock Repurchase Program: 

PayPal announced a new $15 billion share buyback program. In 2018, it kicked off a $10 billion program. As per reports, PayPal's buyback in 2022 will be around $4 billion. PayPal's outstanding shares have only been reduced by about 1.4% by the buybacks of the past 3.5 years.

Elliott Management's stake in PayPal: 

The company has confirmed that hedge fund Elliott Management has $2 billion in the company. PayPal has entered into an information-sharing agreement with Elliott Management. PayPal and Elliott Management are aligned with the mutual goal to maximize shareholder value. They will also work towards profitability and increased return of capital.

PayPal: Target price

Based on 27 analysts offering 12-month price targets for PayPal, the average target price is $117.27 with a high forecast of $160 and a low forecast of $80.

  • How was PayPal's Q2'22 result?

  • What is the target price of PayPal?

  • Why is PayPal stock up?