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PayPal stock (NASDAQ: PYPL) is trading above a key level after the release of the company's latest earnings report. This is a major turnaround for the stock of the payment giant after disappointing earnings in its last quarter. Let's delve into the intricacies of the price action to see where it's headed next.
On Tuesday, PayPal Holdings Inc. released its Q1 earnings report. The report showed that revenue beat Wall Street expectations, causing PYPL stock to open almost 4% higher.
PayPal investors were pleasantly surprised as the company reported a first-quarter revenue growth of 9% on a YoY basis. The quarterly revenue growth, which was expected to remain at $7.5 billion by analysts, came to $7.7 billion.
However, the adjusted earnings per share for the quarter ending in March 2024 came at $1.08 against the market expectations of $1.22. This decrease was offset by the 14% YoY increase in total payment volumes and an 84 basis point increase in the operating margin, which remained at 18.2%. This was a major achievement as PayPal stock fell to its 6-year lows in October when the price retested to the $50 level.
After a strong bounce from the major psychological level of 5,000 points, the S&P 500 index fell by 22 points on Tuesday. This also marked the fresh weekly low for the benchmark index, around 5,088. The sell-off could be attributed to a 1.15% increase in the 10-year treasury yield and a 0.39% uptick in the dollar strength (DXY) index.
For a deeper understanding of the NASDAQ: PYPL chart, let's analyze it on a daily timeframe. The recent PayPal earnings report has pushed its stock price above the $68 resistance level. This level has been acting as a major resistance since the price broke below it in August 2023.
Nevertheless, it is too soon to pop the champaign bottles as the breakout is still not confirmed. PayPal price prediction might flip very bullish if the bulls turn the $68 resistance into a support zone. This might propel the price toward the next resistance level, which is above $76.
