Requisite Capital Management’s Bryn Talkington bought PayPal Holdings Inc (NASDAQ: PYPL) last week after the stock fell to 2021 lows and found support around the $202 level.
What Happened: PayPal announced worse-than-expected third-quarter revenue results and issued guidance below estimates.
PayPal reported quarterly earnings of $1.11 per share, which beat the estimate of $1.07 per share. The company reported quarterly revenue of $6.18 billion, which came in below the estimate of $6.23 billion.
PayPal said it expects fourth-quarter adjusted earnings to be about $1.12 per share versus the estimate of $1.27 per share. The company expects fourth-quarter revenue to be in a range of $6.85 billion to $6.95 billion versus the estimate of $7.24 billion.
Talkington’s Take: “I believe in the fundamentals, but when the market doesn’t and the stock breaks down you really gotta look at technicals,” Talkington said on CNBC’s “Fast Money Halftime Report.”
The stock’s move to the $202 level was a retracement to September and October 2020 levels, according to Talkington.
“I would argue that the company is in much better shape and has much better transparency and visibility going forward than it did a year ago,” she said.
Talkington thinks that when PayPal’s Venmo is incorporated into the Amazon.com Inc (NASDAQ: AMZN) platform, it will be a catalyst for the stock.
“People aren’t even remotely focusing on that today so I think that it was a good entry point,” she said.
Talkington told CNBC that she purchased the stock for around $206 per share.
PYPL Price Action: PayPal has traded as high as $310.16 and as low as $183.54 over a 52-week period.
The stock was up 1.06% at $214.79 at time of publication.
Photo: courtesy of PayPal.
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