PayPal Share Price Forecast March 2022 – Time to Buy PYPL?
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Shares of American multinational financial technology company PayPal (NASDAQ: PYPL) are in the green today, after closing at $100.22 as of March 9th (19:59 EST). PayPal shares have surged higher along with the broader market despite one analyst downgrading them. Many investors are tempted to buy PayPal shares right now despite the Bank of America (BofA) not projecting any upside for the stock this year.
PayPal – Technical Analysis
PayPal’s financial statement indicates a market cap of $116.757 billion with total assets worth $75.803 billion. Revenue for 2021 was at $25.56 billion with a profit margin of 16.31% compared to $21.43 billion in 2020.
Oscillators such as Stochastic RSI Fast (3, 3, 14, 14)(56.53), Williams Percent Range (14)(−62.56), Bull Bear Power(−10.56) and Ultimate Oscillator (7, 14, 28)(37.39) are neutral. On the other hand, moving averages such as Simple Moving Average (10)(103.10), Exponential Moving Average (20) (110.54), Simple Moving Average (20)(107.06), Exponential Moving Average (30)(120.08) and Simple Moving Average (30)(119.74) are indicating a sell action.
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Recent Developments
PayPal made the headlines after it a new service allowing customers to use cryptocurrencies to shop at 26 million merchants on the network starting in 2021. The New York State Department of Financial Services granted PayPal the first conditional cryptocurrency license, allowing customers to purchase Bitcoin, Litecoin, Ethereum, and Bitcoin Cash. The company operates in 202 markets and has 426 million active, registered accounts as of 2022 and supports 25 currencies worldwide. PayPal has also suspended ll activities in Russia due to 2022 Russian invasion of Ukraine, starting from March.
Back in February this year, PayPal released its fourth-quarter and fiscal year 2021 earnings report. As a result, the market responded harshly, sending the shares down. However, the results weren’t bad from the whole year’s perspective. The company generated $5.4 billion in free cash flow, with revenue and total payment volume growing 18% and 33% respectively. In its conservative guidance, management predicted revenue growth of 15% to 17% for the fiscal year 2022.
PayPal management also announced plans to shift away from high levels of user growth and toward better monetization of its active users, after careful analysis and research. The second half of the year should also be better for PayPal since it will no longer need to account for the effect of a change in its partnership with eBay. Management also expects adjusted earnings per share in 2022 to increase by 3% this year. The company finished with an additional 49 million active accounts to finish 2021 with 426 million, which is a sign of a trusted company.
Should You Buy PYPL Shares?
Analysts are in two minds about whether competitors like Apple Pay are encroaching on PayPal’s market. As the company’s management shifts its strategy towards driving higher revenue per user rather than new users, customer account growth is likely to slow. This is affecting the share performance of the company.
On the other hand, PayPal’s early outlook calls for adjusted earnings and revenue to increase by 20% in 2023. There could be a temporary slowdown in growth partly caused by the transition of eBay to its own payments system. The recent sell-off also appears to be caused by management’s shift in growth strategy. Investors should wait till the company actually reaccelerates its growth toward the end of 2022 before buying PayPal shares.
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