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Investing.com - PayPal Holdings Inc (NASDAQ:PYPL), a prominent financial services player with $32.29 billion in annual revenue and a perfect Piotroski Score of 9 according to InvestingPro, experienced a service disruption in Germany that temporarily halted payments through several large banks, according to Raymond James, which maintained its Market Perform rating on the stock.
German newspaper Sueddeutsche Zeitung first reported the technical issues, though PayPal has since confirmed the problem has been resolved and payments have returned to normal operations.
Raymond James estimates that each day of disruption could create approximately a 10 basis point headwind to PayPal’s third-quarter Branded Total Payment Volume (TPV) growth, a key performance indicator closely watched by investors.
The analysis is based on Statista’s projection that the German e-commerce market will reach approximately $105 billion in 2025, with PayPal management previously stating that roughly 80% of German e-commerce transactions flow through its platform.
Raymond James calculates that Germany represents about 5% of PayPal’s total TPV, with approximately 60% of that volume being Branded, but does not expect any material impact to transaction margin or earnings per share from this temporary disruption.
In other recent news, PayPal reported its second-quarter earnings, exceeding expectations in headline revenue, transaction profit, and non-GAAP earnings per share. Despite these positive results, some analysts expressed concerns. KeyBanc Capital Markets maintained a Sector Weight rating, citing issues with transaction margins and a slowdown in branded online total payment volume growth, partly due to tariffs. Truist Securities reiterated its Sell rating, pointing to concerns over the quality of PayPal’s growth drivers. Mizuho adjusted its price target for PayPal to $84, maintaining an Outperform rating but noting a modest deceleration in total payment volume growth. Meanwhile, Keefe, Bruyette & Woods kept its Outperform rating, raising earnings per share estimates for 2025 and 2026 due to higher net revenues and a lower tax rate. Additionally, PayPal faced operational challenges in Germany, where several banks blocked transactions over fraud concerns, delaying payments to merchants. These developments highlight the mixed perspectives from analysts and ongoing operational hurdles for PayPal.
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