PayPal Q1 Preview: I Expect A Result Beat But Guidance Miss (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Retail sales growth data in PayPal Holdings, Inc.'s key markets (U.S., UK, and Germany) suggests a top-line revenue beat scenario for the upcoming Q1 FY25 earnings release.
• There are risks of guidance misses for Q2 and beyond due to a potential recession and weakening consumer sentiment. Some analysts have started to downgrade their estimates for FY25.
• Updates on PayPal's one platform integration and new branded checkout experience rollout across global markets are key focus points in the Q1 earnings call.
• PYPL stock is relatively undervalued vs. peers on a 1-yr fwd P/E basis, as it is trading at a lower-than-usual discount.
• PYPL vs. S&P 500 technicals are near a monthly support, but bearish momentum is still strong. I expect some more consolidation to digest that bearish pressure away before meaningful upside.

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