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PayPal share price: 3 things to look out for in its Q3 earnings

Investors are expecting PayPal to record a strong sales growth in its Q3 results next week, with the direction of its share price heavily dependent on whether it meets expectations or falls short of the mark.

PayPal Source: Bloomberg

PayPal will unveil its Q3 results on October 23. Analysts are predicting the payments company to deliver a strong set of earnings, driven by decent sales growth, with its share price likely to climb higher if it is able to live up to expectations.

In preparation for its upcoming results, IG looks at the key things to look out for ahead of its latest trading update.

Analysts expect strong sales growth from PayPal

According to Zacks Equity Research, analysts expect PayPal to record quarterly earnings of $0.69 a share in its latest trading update, representing a 19% increase year-over-year.

Forecasters also predict that the payments provider will generate revenues of $4.34 billion, which if achieved, will represent a 17.9% increase compared with the same period a year prior.

PayPal stock could march towards record levels again

If PayPal can meet analysts’ expectations next week its stock is likely to climb higher, with investors hoping the share price could claw its way back to trading near record levels it hit earlier this year.

In July, the stock hit an all-time high of $121.30, with the company continuing to benefit from consumers shifting away from cash and checks in favour of digital payments. In fact, the digital payments platform’s shares have risen by 20% since January.

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PayPal downgrades full-year guidance

The rally PayPal’s stock enjoyed ended in late July, after the company downgraded its full-year guidance.

In its Q2 earnings, the payments provider told investors that its full-year revenue would be lower than originally forecast, sending its shares plummeting by 15%. Since then, its share price has recovered only slightly, with it trading 14% below its all-time high.

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