PayPal shares surge on higher forecast for profit, buybacks
PayPal Holdings Inc. shares jumped the most in more than 20 months after the payments company boosted its forecast for profit and increased its buyback plan.
“We are making steady progress on our strategic transformation,” Chief Executive Officer Alex Chriss, who has been working to streamline operations, said in a statement Tuesday.
PayPal now predicts adjusted earnings per share will increase in the “low- to mid-teens” this year, up from a previous forecast of “mid- to high-single-digit” growth, the San Jose, California-based company said in a presentation. It also expects full year EPS of $3.88 to $3.98, up from $3.65.
With Chriss at the helm, PayPal is slimming down after several acquisitions in recent years and a slump in the firm’s shares. Management has been broadly revamped under Chriss after he said earlier this year that there hadn’t been a lot to celebrate at the firm.
“We are operating from a position of strength, delivering for our customers, and focusing on long-term profitable growth,” Chriss said Tuesday.
PayPal’s share buyback plan will increase to $6 billion, up from a prior plan of buying back at least $5 billion this year. The firm returned $1.5 billion to stockholders through repurchases during the second quarter, it said.
Shares of the company jumped as much as 10%, the biggest gain since November 2022. The stock advanced 7.4% to $63.27 at 9:55 a.m. in New York.
Total payment volume increased 11% in the second quarter, to $416.8 billion, just shy of the $417.3 billion average estimate of analysts in a Bloomberg survey. Transaction margin dollars increased 8% in the second quarter to $3.61 billion.
Venmo, the popular money-transfer app, added $73.3 million to the firm’s overall total payment volume in the quarter, according to the presentation.
“What excites me most about Venmo is that we are only scratching the surface of its potential,” Chriss said on a conference call with analysts. “We see substantial room for growth.”