PayPal Holdings, Inc. (PYPL) has been making waves in the stock market recently, with its shares gaining volume momentum and sparking discussions among investors. After consolidating under $100 since April 2022, PayPal’s stock has caught the attention of social media platforms and chatrooms, fueling speculation about its emergence as a new meme stock.
The trajectory of PayPal’s stock has been an interesting one. During the pandemic, the stock was regarded as a “COVID-19 play” and reached an intra-day record of $310.16 on July 26, 2021, completing a double top formation. However, the stock then underwent a secular downtrend until June 2022, influenced by economic reopening, rising interest rates, and inflation concerns impacting fundamentals.
In early May and August of 2023, the release of PayPal’s first and second-quarter results led to significant downward gaps in the stock. After hitting a low of slightly over $51 in late October 2023, the stock started to rise again.
Recently, trading volume for PayPal surged, consistently surpassing the three-month average volume. On January 22, approximately 44 million shares exchanged hands as the stock peaked at $68.21. Despite some gains since then, the stock closed Friday’s session up 1.76% at $61.78.
However, the recent weakness in PayPal’s stock can be attributed to a lukewarm response to the “First Look” keynote by the new CEO, Alex Chriss. The event aimed to showcase new product innovations and AI enhancements at PayPal and its Venmo mobile payments subsidiary. Some analysts have expressed concerns about a lack of significant product announcements and updates on measures to drive Venmo checkout usage and acceptance.
PayPal faces competition from other digital wallets like Apple Pay, which has led KeyBanc Capital Markets to express negativity about PayPal’s wallet share based on its fintech survey. Morgan Stanley’s James Faucette also voiced concerns about a lack of significant product announcements in the “First Look” presentation, impacting sentiment.
Despite these challenges, PayPal remains a focus among retail traders, with optimism expressed for potential growth in 2024. Technically, the stock faces immediate resistance at its 200-day moving average of $63.49, with potential targets at $72 and $92. Support levels include the 50-day moving average of $60.11 and around $55.
Investors are eagerly awaiting PayPal’s fourth-quarter results, which are set to be released on February 7. Analysts are expecting earnings per share of $1.36 on revenue of $7.87 billion. The average analysts’ 12-month price target for PayPal is $72.07, implying a 17% upside potential from current levels.
In conclusion, PayPal’s recent stock performance has garnered attention in the market, with discussions on social media platforms and chatrooms. While the stock has faced challenges and concerns from analysts, retail traders remain optimistic about its potential for growth in 2024. Investors will be closely watching PayPal’s upcoming earnings release and monitoring its performance in the coming months.
