PayPal Holdings, Inc. (PYPL) is expected to report earnings of $1.88 per share on revenue of $5.2 billion for the fiscal third quarter ended September 30, according to analysts polled by Thomson Reuters.
This would represent an increase of 37% over the same period last year. The company is expected to report net income of $3.3 billion for the full fiscal year, which would be an increase of 54%.
While these numbers are impressive, investors will be closely watching the company’s debt levels. PayPal’s debt-to-equity ratio stood at 3.2 as of September 30, which is well below the company’s 4.0 Target.
The company’s cash and equivalents totaled $5.1 billion as of September 30, which should provide some cushion in the event of any unforeseen financial problems.
The outlook for PayPal is positive, and the stock is currently trading at a reasonable valuation. However, investors will be watching the debt levels closely to make sure that the company does not overextend itself.
If the debt levels stay under control, PayPal should be able to report strong earnings and maintain its market share.
