PayPal shares fell over 9% on February 4, 2025, after the company’s adjusted earnings for the fourth quarter of 2024 fell short of analysts’ expectations. Despite reporting revenue and net income that exceeded estimates, the disappointing earnings outlook led to a significant drop in stock value.
- PayPal shares fell after earnings miss.
- Revenue exceeded analyst expectations at $8.37 billion.
- Net income slightly above estimates, down 20%.
- Adjusted EPS projections fell short for 2025.
- New $15 billion stock buyback program announced.
- Shares down over 9% but up 30% annually.
In its latest financial report, PayPal, which owns popular platforms like Venmo, announced revenue of $8.37 billion for the fourth quarter of 2024. This figure represents a 4% increase from the previous year and is higher than the $8.26 billion analysts had predicted. However, the adjusted earnings of $1.21 billion fell short of the consensus estimate of $1.44 billion, leading to a decline in stock prices.
PayPal’s net income for the quarter was $1.12 billion, or $1.11 per share, which is a 20% decrease compared to the same period last year. This figure was slightly above the expected $1.08 billion and $1.06 per share. The company’s projections for adjusted earnings per share (EPS) for the first quarter and full year of 2025 also missed analyst estimates. PayPal expects to earn between $1.11 and $1.13 per share for Q1, and $4.80 to $4.95 for the full year, while adjusted EPS projections are significantly lower than anticipated.
In addition to the earnings report, PayPal’s board approved a new $15 billion stock buyback program, complementing the remaining $4.86 billion from the previous buyback initiative. Despite the stock’s decline on Tuesday, shares have increased approximately 30% over the past year, indicating a generally positive trend despite recent challenges.
The disappointing adjusted earnings and outlook have raised concerns among investors, despite the positive revenue and net income figures. The new stock buyback program may provide some support for the stock, but the overall market reaction indicates caution moving forward.
