“Since topping out around $309, PYPL fell to a recent low of $132.57 – and could fall even more. Typically, we’ll tell investors to buy the fear, even the “blood in the streets” with a drop like this. But the pullback doesn’t look like it’s over,” we noted on February 2.
All thanks to guidance.
The company said it expects to earn between $4.60 and $4.75 for the fiscal year, which is below expectations for $5.25. Revenue growth of 15% to 17% is also lower than forecasts for 18%.
However, the stock may be reaching a bottom.
For one, it’s technically oversold. After gapping even lower, the stock is excessively stretched on RSI, MACD, and on Williams’ %R. Two, insiders are buying. On February 3, CEO Daniel Schulman bought 7,994 shares for just under $996,000.
Director Frank Yeary bought 4,000 shares for just under $500,000 on February 4. Director David Dorman bought 8,400 shares for just over $1.002 million. Eventually, we’d like to see PYPL refill its bearish gap around $171 from a current price of $115.