Jim Cramer Says Paypal Is 'COVID Currency Play'

Katherine Ross

Paypal reported earnings on Wednesday, May 6.

The online payments giant reported Q1 revenue of $4.62 billion (up 12% annually) and non-GAAP EPS of $0.66. Revenue missed a $4.74 billion consensus, while EPS, which saw a $237 million ($0.17 per share) hit from credit loss reserves created due to revised macro projections, missed a $0.75 consensus.

And, following in the steps of many other companies, PayPal is withdrawing its full-year guidance, citing a "lack of visibility into the near-term economic effects of COVID-19 and the wider range of potential outcomes."

“Perhaps the biggest factor impacting our revenue performance for the second quarter is the extent to which behavioral changes associated with social distancing measures continue at the same pace,” said CFO John Rainey on PayPal’s call. He says PayPal’s Q2 guidance, which implies lower annual growth in May/June relative to April, assumes social distancing measures are slowly relaxed, but that there’s still “a more elevated level of e-commerce spend than what we were experiencing going into the crisis” at the end of Q2.

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