PayPal slides on revenue forecast, slower pace of new customers

PayPal Holdings shares dropped after the company lowered its full-year revenue forecast and said growth in new accounts slowed in the third quarter from the first half’s blistering pace.

While the firm continued to add customers amid the ongoing boom in online shopping, the quar ter ’ s 15.2 million net new active accounts were less than analysts expected and down from 21.3 million in the second quarter. Shares fell 6% in late trading.

PayPal, based in San Jose, now sees full-year revenue climbing by 21% to 22% excluding the impact of currency swings. That’s down slightly from the 22% it expected three months ago.

The firm still anticipates adding 70 million active accounts this year.

The company has been a big winner in the pandemic, with its shares surging more than 70% in 2020 before today while larger payments firms Visa and Mastercard are down for the year.

T hat’s lef t investors vigilant for any signs the momentum is slowing.

Still, spending on the company’s platform surged 36% to $247 billion, topping the $232 billion average of analyst estimates.

That includes $ 44 billion in payments made on PayPal’s person-to-person platform Venmo, which posted its best quarter ever in the three months ended Sept. 30.

Chief Executive Officer Dan Schulman said the company has continued to benefit from shoppers being stuck at home as a result of lockdown orders, noting that consumers over the age of 50 are signing up for PayPal faster than any other demographic.

“Clearly as people spend more time at home as the virus increases, that will lead to more online shopping,” Schulman said.

PayPal shares fell 6.1% to $176.33 at 5 p.m. in late trading in New York. The stock has surged 74% this year through Monday’s close, outpacing the 21% advance of the S& amp;P 500 Information Technology Index.

PayPal now sees adjusted profit climbing 27% to 28% this year, more than the 25% jump previously forecast.