Adjusted earnings per share were only up by 6% from a year ago, indicating slower underlying growth and lower profitability than expected.
PayPal reported fourth-quarter earnings on Wednesday.
Total payment volume for PayPal increased by 15% to $409.8 billion in the period compared to $371.5 billion in the prior year.
PayPal, a digital payments company with over 426 million active accounts in the December quarter of 2023, reported fourth-quarter earnings on Wednesday. The total payment volume for PayPal increased by 15% to $409.8 billion in the period compared to $371.5 billion in the prior year, but its adjusted earnings per share were only up by 6% from a year ago, indicating slower underlying growth and lower profitability than expected.
Despite this news, PayPal's stock price has been on an upward trend since early February. On Thursday morning, PayPal shares were trading at $57.10 per share after closing the previous day at $56.94 per share.
PayPal Holdings shares dropped 10% following the company's announcement of lower active accounts and tepid growth expectations for 2024.
The total active accounts at PayPal decreased to 426 million in the December quarter from 428 million in the prior quarter due to higher churn levels in Latin America and Asia Pacific region.
Accuracy
CEO's strategy compared to turning around the Titanic
*Stock prices used were from the trading day of Feb. 7, 2024. The video was published on Feb. 7, 2024.
Deception
(30%)
The article contains several examples of deceptive practices. Firstly, the author uses sensationalism by stating that PayPal's shares fell 10% following a decline in active users and tepid views for growth. This statement is not supported by any evidence presented in the article and could be seen as misleading to readers who may assume that this represents a significant drop in PayPal's performance. Secondly, the author uses selective reporting by focusing on PayPal's decline in active accounts without providing context or explanation for why this occurred. This creates an impression of negative growth when it is not necessarily accurate. Lastly, the article contains emotional manipulation through phrases such as 'tepid views for growth', which could be seen as trying to elicit a specific response from readers rather than presenting objective information.
The author uses selective reporting by focusing on PayPal's decline in active accounts without providing context or explanation for why this occurred. This creates an impression of negative growth when it is not necessarily accurate.
The author uses sensationalism by stating that PayPal's shares fell 10% following a decline in active users and tepid views for growth. This statement is not supported by any evidence presented in the article and could be seen as misleading to readers who may assume that this represents a significant drop in PayPal's performance.
Fallacies
(85%)
The article contains several fallacies. Firstly, the author uses a dichotomous depiction of PayPal's growth prospects by stating that the company expects to see profit growth in the current year but also mentions that it barely expects to see any such growth. This creates an either-or situation where these two statements cannot both be true at once. Secondly, there is a fallacy of appeal to authority when PayPal's finance chief Jamie Miller states that overall consumer spending and activity levels will remain relatively consistent for 2024 without providing any evidence or data to support this claim. Lastly, the author uses inflammatory rhetoric by stating that PayPal has dropped 10% in a day and 27% in the past year, which may create an emotional response from readers rather than presenting objective information.
PayPal expects to see profit growth in the current year but also mentions that it barely expects to see any such growth. This creates an either-or situation where these two statements cannot both be true at once.
Bias
(75%)
The article contains a statement that PayPal's total active accounts dropped to 426 million in the December quarter from 428 million in the prior quarter. This is an example of monetary bias as it implies that PayPal has lost money and this could be seen as negative for investors.
PayPal's total active accounts dropped to 426 million in the December quarter from 428 million in the prior quarter.
Site
Conflicts
Of
Interest (50%)
PayPal has a conflict of interest on the topic of international and small business growth as they are looking to move into new areas for growth that have higher margin opportunities in these regions.
CEO's strategy compared to turning around the Titanic
Accuracy
No Contradictions at Time
Of
Publication
Deception
(30%)
The article is deceptive in several ways. Firstly, the author uses a sensationalist title that implies PayPal's stock price has fallen significantly when it hasn't. Secondly, the author quotes an analyst who compares CEO Jack Dorsey's strategy to turning around the Titanic which is not accurate as they are two different situations and cannot be compared directly. Lastly, there is no disclosure of sources in this article.
Fallacies
(80%)
The article contains an appeal to authority fallacy by citing the opinion of one analyst who likens CEO's strategy to turning around the Titanic. The author also uses inflammatory rhetoric when describing PayPal plummeting after disappointing forecast.
>Published Thu, Feb 8 20243:16 PM EST<br>Updated Thu, Feb 8 20245:14 PM EST
Bias
(75%)
The author uses a metaphor comparing the CEO's strategy to turning around the Titanic. This is an example of religious bias as it implies that the CEO has made a grave mistake and will not be able to save PayPal from its fate.
>Published Thu, Feb 8 20243:16 PM EST<br>Updated Thu, Feb 8 20245:14 PM EST
Site
Conflicts
Of
Interest (50%)
Kate Rooney has a financial tie to PayPal as she is an employee of CNBC which owns the site that published this article. She also has personal relationships with sources and subjects in the tech industry due to her role at CNBC.
Author
Conflicts
Of
Interest (50%)
Kate Rooney has a conflict of interest on the topics PayPal and CEO strategy as she is reporting on her own company.
PayPal is losing market share to competitors like Apple.
Its payment volume is shifting to lower-margin channels like Braintree, and it continues to lose customers even as it competes in a growth industry: digital payments.
Investors were reminded of all these problems when PayPal reported fourth-quarter earnings on Wednesday, and they didn't like what they heard.
PayPal stock was trading down 10% as of 2:26 p.m. ET for the week, according to data from S&P Global Market Intelligence.
The company delivered solid growth with adjusted earnings per share up 19% to $1.48, ahead of the consensus of $1.27 in fourth-quarter results but decline in active accounts showed weakness in the underlying business.
Accuracy
The company plans to move into new areas for growth that have higher margin opportunities such as international and small business.
Deception
(30%)
PayPal is losing market share to competitors like Apple and its payment volume is shifting to lower-margin channels. It continues to lose customers even as it competes in a growth industry: digital payments. Investors were reminded of these problems when PayPal reported fourth-quarter earnings on Wednesday, which showed that the company delivered solid growth but also lost active accounts at a rate of 2%. The decline in active accounts showed weakness in the underlying business and guidance sent investors heading for the exits.
PayPal is losing market share to competitors like Apple.
Fallacies
(75%)
The article contains several fallacies. The author uses an appeal to authority by citing PayPal's fourth-quarter earnings and guidance as evidence of the company's struggles. However, this information alone does not necessarily indicate that PayPal is struggling or that its growth prospects are poor. Additionally, the author uses a dichotomous depiction when describing PayPal's payment volume shifting to lower-margin channels like Braintree as if it were a negative thing. This could be seen as an appeal to emotion rather than a logical fallacy. The article also contains inflammatory rhetoric by stating that
Bias
(75%)
PayPal is losing market share to competitors like Apple and its payment volume is shifting to lower-margin channels. It continues to lose customers even as it competes in a growth industry: digital payments. Investors were reminded of these problems when PayPal reported fourth-quarter earnings on Wednesday, which showed slower underlying growth and weakness in the business.
It continues to lose customers even as it competes in a growth industry: digital payments
Its payment volume is shifting to lower-margin channels like Braintree
PayPal is losing market share to competitors like Apple
Site
Conflicts
Of
Interest (50%)
Jeremy Bowman of The Motley Fool has a conflict of interest with PayPal as he is an investor in the company. He also reports on Apple and Braintree which are competitors to PayPal.
Author
Conflicts
Of
Interest (50%)
Jeremy Bowman has a conflict of interest with PayPal as he is an analyst at The Motley Fool which covers the company. He also mentions Braintree and digital payments in his article.
PayPal reported better-than-expected earnings in its fourth quarter.
*Stock prices used were from the trading day of Feb. 7, 2024. The video was published on Feb. 7, 2024.
Accuracy
PayPal Holdings shares dropped 10% following the company's announcement of lower active accounts and tepid growth expectations for 2024.
CEO's strategy compared to turning around the Titanic
Deception
(30%)
The article is deceptive in several ways. Firstly, the author claims that PayPal's stock is down after earnings when it was actually up at the time of publication. Secondly, the author uses a misleading title to suggest that there must be some negative news about PayPal's earnings report when in fact they were better than expected and especially improved transaction margins. Lastly, the article contains an affiliate link which could potentially influence Neil Rozenbaum's opinions on PayPal.
Neil Rozenbaum claims that PayPal's stock is down after earnings when it was actually up at the time of publication.
The article contains an affiliate link which could potentially influence Neil Rozenbaum's opinions on PayPal.
The title of the article is misleading as it suggests that there must be some negative news about PayPal's earnings report when in fact they were better than expected and especially improved transaction margins.
Fallacies
(85%)
The article contains an appeal to authority fallacy by stating that Neil Rozenbaum has positions in PayPal and The Motley Fool recommends it. Additionally, the author uses inflammatory rhetoric when he states that the stock is down after reporting better-than-expected earnings and improved transaction margins.
Neil Rozenbaum has positions in PayPal
The Motley Fool recommends PayPal
Bias
(100%)
None Found At Time Of
Publication
Site
Conflicts
Of
Interest (50%)
Neil Rozenbaum has a financial interest in PayPal as he is an employee of The Motley Fool which owns stock in the company.
Neil Rozenbaum has a financial interest in PayPal as he is an employee of The Motley Fool which owns stock in the company.
*Stock prices used were from the trading day of Feb. 7, 2024.*
Author
Conflicts
Of
Interest (50%)
Neil Rozenbaum has a conflict of interest on the topic of PayPal earnings report as he is an author for The Motley Fool which may have financial ties to PayPal.
Neil Rozenbaum has a conflict of interest on the topic of PayPal earnings report as he is an author for The Motley Fool which may have financial ties to PayPal.
*Stock prices used were from the trading day of Feb. 7, 2024.*
