• PayPal forecast 6% rise in revenue in the current quarter
• The share plunge leads to the lowest opening of the company since May 2020
Shares of PayPal Holdings Inc (NYSE: PYPL) plunged 17% on Wednesday after the company projected lower revenue growth than expected.
PayPal forecast 6% rise in revenue in the current quarter, much lower than 11.7% as estimated by analysts, according to Refinitiv.
The share plunge leads to the lowest opening of the company since May 2020. PayPal said factors such as inflation and supply chain issue has affected its performance.
Investors have been unhappy with the prospects and at least 11 analysts cut their price targets on the stock and BTIG downgraded its recommendation to "neutral" from "buy", reported Reuters.
Transition from eBay
PayPal is transitioning to its own payments platform after the expiration of operating agreement with eBay (NYSE: EBAY), its former parent.
Chief Executive Officer Dan Schulman said on a conference call with analysts said that transition from eBay is expected to put $600 million of revenue pressure in the first half of the year.
"Taken together, supply chain management problems, inflationary pressure on spending by low income customers and ongoing steep declines in eBay volumes created stiff headwinds exiting 4Q/21 that will persist at least through 1H/22," Evercore ISI analysts wrote in a note, reported Reuters.
Picture Credits: Reuters