PayPal Shares Dive 22% After Company Blames Inflation for Weak Guidance

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In an interview with CNBC, PayPal CEO Dan Schulman said the company took “a measured approach” to guidance.

PayPal also missed user growth targets due in part to 4.5 million"illegitimate" accounts that joined the platform, which"affected our ability to achieve our guidance in the quarter," CFO John Rainey said. The company also walked back its user growth goals, which Rainey said was a"choice" to focus on"sustainable growth and driving engagement."

Canaccord Genuity Capital Markets analysts, who maintained a buy rating on the stock but lowered their price target from $315 to $215, wrote in a note Tuesday that PayPal's challenges are mainly"short-term headwinds." "While the pace of growth in net new accounts is expected to moderate in 2022, we are seeing a steady increase in user engagement metrics and expect to see more marketing behind driving engagement in 2022," the Canaccord note said."And already PYPL has shown that it remains nimble despite its size in exploiting rapidly emerging opportunities: scaling an impressive Buy Now Pay Later offering and launch of equity trading.

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