PayPal Stock Price Dives after a Slow Down in Q4 2021 Growth

PayPal reported its Q4 of 2021 financials on Tuesday that resulted in around a 17 percent dive in its share price in after-market hours trading. It was mostly due to a slowdown in growth rate and poor Q1 guidance below the street estimates.

The California-headquartered company generated $6.9 billion in total quarterly revenue. Though there was a growth of 13 percent, it was much lower than the 25 percent increase the company witnessed in the same quarter of the previous year.

The adjusted earnings per share of the company came in at $1.11, which improved from the previous year’s $1.08 but marginally lower than the analysts' consensus estimate of $1.12.

Bearing Estimates

The payments company is now expecting non-GAAP earnings per share of 87 cents for the first quarter of 2022, which is much lower than the analyst estimation of $1.16. Moreover, it is expecting the 2022 full-year revenue growth between 15 percent and 17 percent whereas analysts expected this to be around 17.9 percent.

However, PayPal's CEO, Dan Schulman, pointed out that despite the conservative forecast the company is expecting an acceleration in the growth in the second half of the year. Moreover, he pointed out that eBay’s transition to its won payments platform will also put $600 million revenue pressure on PayPal this year.

Furthermore, PayPal revealed that the total payment volume (TPV) for the quarter came in at $339.5 billion, which is 23 percent higher year-over-year on a spot and foreign-exchange neutral basis. Transaction revenue stood at $6.4 billion compared to $5.61 billion in the previous quarter.

Apart from its mainstream payments services, PayPal offers cryptocurrency buying and selling services in multiple major markets. However, the company does not include crypto payments numbers in the total payment volume.