PayPal tumbles after forecast cut

PayPal Holdings shares dropped nearly 6 per cent in morning trade on Friday after the digital payments heavyweight lowered its annual revenue forecast, warning of a bleak holiday quarter as consumers cut back on discretionary spends, reports Reuters.
Decades-high inflation has hit the purchasing power of consumers who also have to contend with the threat of a looming recession.
"Consumers have been trading down from high-end, expensive to more affordable brands while also spending more on non-discretionary products," Wedbush analyst Moshe Katri told Reuters.
PayPal said lower- and middle-income households had started reducing non-essential spending, as they grapple with higher prices of food, energy and gas.
"Given a challenging macro environment, slowing e-commerce trends and an unpredictable holiday shopping season, we are being appropriately prudent in our Q4 revenue guide," Chief Executive Daniel Schulman said in a call with analysts.
The San Jose, California-based company on Thursday cut its 2022 adjusted revenue growth outlook to 10 per cent from 11 per cent forecast earlier, while also forecasting bleak e-commerce growth in the fourth quarter.