PayPal Shares Drop After Disappointing Results

Shares of PayPal Holdings took a plunge in late trading on Wednesday after the company's latest financial results failed to meet Wall Street's expectations.

According to FactSet, PayPal reported non-GAAP earnings of $1.16 per share, slightly surpassing the projected $1.15. The company's revenue of $7.3 billion also exceeded expectations of $7.27 billion. Additionally, PayPal's total payment volume of $376.5 billion outperformed estimates of $368.87 billion.

Despite these positive figures, PayPal shares (ticker: PYPL) experienced a 6.7% decline in after-hours trading.

Analyst Trevor Williams from Jefferies, who rates the stock as Hold with a $75 price target, points out that investors are concerned about a decrease in transactional gross profit that fell short of expectations. Furthermore, the transactional take rate decreased to 1.74%, compared to the expected 1.79%.

Looking ahead, PayPal forecasts its third-quarter revenue to reach $7.4 billion. The company expects non-GAAP earnings per share to range between $1.22 and $1.24. These projections slightly exceeded the FactSet consensus forecasts of $1.21 per share and revenue of $7.33 billion.

CEO Dan Schulman expressed confidence in the company's progress, stating, "We have high confidence that our business is on the right path and we're seeing clear signs that the investments we've made are paying off," in the earnings release.