5 big earnings reports: PayPal reports Q4 beat, Lyft shares sink

By Davit Kirakosyan

Investing.com -- PayPal Holdings beat Q4 expectations and said CEO Dan Schulman plans to retire at the end of the year, while Lyft shares dived after a disappointing result. Here is the full roundup of the 5 biggest earnings reports yesterday, all first covered on InvestingPro. Start a free trial for real-time earnings coverage.

PayPal's earnings and guidance surpass expectations, CEO Schulman to retire

PayPal's (NASDAQ:PYPL) Q4 EPS came in at $1.24, beating the consensus estimate of $1.20. Revenue was $7.4 billion, slightly better than the consensus estimate of $7.39B.

Total payment volume was slightly lower than expected, totaling $357.4B, a 5% increase. This was lower than the consensus estimate of $360B.

For the full-year 2022, the company's revenue increased by 8% reaching $27.5B, while the total volume of payments grew 9% to $1.36 trillion, both meeting expectations.

For Q1/23, the company expects revenue to grow 7.5% and adjusted EPS in the range of $1.08 to $1.10, better than the consensus of $1.07.

In a divergence from prior quarters, the company said it will not issue full-year revenue growth guidance. For 2023, PayPal expects EPS of $4.87, better than the consensus of $4.75.

The other big news in the release is CEO Dan Schulman, who joined PayPal in 2014, will retire from his role on December 31st. He will continue to serve on the Board of Directors after his retirement, and the board will work with a search firm to find his replacement.

In initial analyst responses, JPMorgan raised its target price for PayPal to $100 while Piper Sandler lowered its target price to $82. PayPal is trading flat in the pre-market, close to its $78.42 close Thursday.

PepsiCo beats on earnings, misses on guidance; shares rise

PepsiCo (NASDAQ:PEP) reported its Q4 results Thursday before market open, with EPS of $1.67 coming in better than the consensus estimate of $1.65. Revenue grew 11% to $28B (vs. consensus of $26.82B), driven by the 25% revenue growth in the Frito-Lay North America business unit. Elsewhere, Latin America revenue soared by 21%, significantly surpassing the average analyst prediction and helping to offset the decline in revenue from Europe (-2%).

The company announced on Thursday that it won't increase soda and snack prices again, following multiple price hikes last year that contributed to their Q4 profit and revenue exceeding analyst expectations. While expecting inflationary pressures to persist in 2023, the company believes consumer demand will remain strong.

For 2023, the company expects 6% organic revenue growth and EPS of $7.20, worse than the consensus estimate of $7.28.

The company also announced a 10% hike in its annualized dividend, starting with the June 2023 payment. This represents its 51st consecutive annual increase. Moreover, the company plans to repurchase approximately $1.0B worth of shares. Shares finished up nearly 1% Thursday, and the company saw price target hikes from Credit Suisse and Morgan Stanley after hours.

Lyft shares plunge following a surprise loss and weaker guidance

Lyft (NASDAQ:LYFT) shares plunged 33% in Friday pre-market trading after the company reported disappointing results, with Q4 adjusted EPS of ($0.74) coming in significantly below the consensus estimate of $0.15. Revenue was $1.18B, compared to the consensus estimate of $1.15B.

Active riders on the platform rose 8.7% year-over-year to 20.4 million in Q4, while revenue per active rider grew 11.5% year-over-year to $57.72. The contribution margin dropped to 35.3% from 47.1% in the quarter.

For Q1/23, the company expects revenue of $975M, missing the consensus estimate of $1.09B. Adjusted EBITDA is expected between $5M and $15M.

"Our Q1 guidance is the result of seasonality and lower prices, including less Prime Time," the company said.

Following the results, several Wall Street analysts downgraded the company, including DA Davidson with a new Neutral rating (from Buy), Loop Capital with a new Hold rating (from Buy), Truist securities with a new rating of Hold (from Buy), and KeyBanc with a new rating of Sector Weight (from Overweight). The results were especially striking in light of Uber's (NYSE:UBER) strong report two days ago, though Uber is also trading down 3.5% in sympathy.

Expedia reports Q4 miss, shares fall

Expedia (NASDAQ:EXPE) shares traded down more than 2% pre-market Friday after the company reported its Q4 results Thursday after the bell, with EPS of $1.26 missing the consensus estimate of $1.69 due to a spike in cancellations and bad weather near the end of the quarter.

Revenue grew 15% year-over-year to $2.62B, worse than the consensus estimate of $2.69B. Total gross bookings were up 17% year-over-year as gross bookings for lodging and air grew.

Following the results announcement, several analysts adjusted their price targets on the company, including Barclays with a new price target of $140.00 (from $129.00), JPMorgan with a new price target of $124.00 (from $117.00), and Evercore ISI with a new price target of $150.00 (from $142.00). Meanwhile, Credit Suisse lowered its price target on the stock to $174.00 from $176.00. Similar to the Uber case with Lyft, Booking Holdings (NASDAQ:BKNG) is trading off nearly 1% in Friday's pre-market in sympathy with Expedia's results.

Cloudflare shares gain on Q4 beat

Cloudflare (NYSE:NET) shares surged nearly 7% pre-market today after the company reported its Q4 results, with EPS of $0.06 coming in better than the consensus estimate of $0.04. Revenue was $274.7M, compared to the consensus estimate of $274.16M.

For Q1/23, the company expects EPS in the range of $0.03-$0.04, compared to the consensus of $0.30, and revenue in the range of $290-291M, compared to the consensus of $291M.

For the full year, EPS is expected in the range of $0.15-$0.16, compared to the consensus of $0.15. 2023 revenue is expected to be in the range of $1.33-1.342B, compared to the consensus of $1.31B.

Following the results, Citi raised its price target on Cloudflare to $59.00 (from $50.00), while maintaining a Neutral rating. Meanwhile, KeyBanc raised its price target on the stock to $80.00 (from $59.00), while maintaining an Overweight rating.

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