The reporting of the PayPal payment service – it clearly does not need additional advertising – came out ambiguous at the end of the fourth quarter. Nevertheless, it leaves room for optimism.

So:

• revenue +7% YoY to $7.4 billion, in line with forecasts;
• operating profit +12% YoY to $1.7 billion;
• adjusted net profit +7% YoY to $1.4 billion;
• EPS of $1.24 per security against $1.11 a year earlier, the forecast was $1.18-1.20.

Adjusted earnings per share growth is observed for the first time in four quarters.

The company has completely taken control of operating costs. This allowed them to return to work on increasing margins and EPS growth.

The total volume of transactions in the fourth quarter of 2022 on all PayPal services increased by 5% year-on-year ($357 billion). The volume of paid transactions expanded by 13% YoY and amounted to $6 billion. The numbers themselves are not bad, but they are the weakest since 2015, when the company began to disclose these components.

The exchange rate factor probably played a negative role. This has affected all areas of the international work of the PayPal service.

The company has well promoted the BNPL installment purchase service among users. In 2022, the service increased the number of active customers to 25 million (+105% year-on-year), and the total volume of transactions increased by 160% YoY and reached $20.3 billion.

The plans for 2023 include the continuation of painstaking work to reduce operating costs, which will result, first of all, in a reduction in staff. The company’s forecast for EPS in the first quarter is $1.08-1.10. The company has every chance to confidently move along the growth trajectory.

The consensus forecast for PayPal shares in the future for 6 months is $115-120.

On the daily trading chart of PayPal shares, the MACD indicator decreases in the positive zone and forms a sell signal. The Stochastic oscillator has reached the oversold zone and may begin forming a buy signal.