Wall Street experts analyze a variety of macro-, sector-, and company-specific factors to create estimates of a company’s quarterly performance. One such aspect that is being increasingly monitored, especially for businesses with online sales channels, is website traffic.
With increasing digitization and increased focus on online channels, website traffic trends can help gauge interest in a company’s products and services.
The TipRanks website traffic tool is powered by SEMrush Holdings (SEMR) is the world’s largest website usage monitoring service, providing estimates of website visits over a given period of time. We used this tool to evaluate PayPal and Domino’s website traffic in advance of our first quarter results.
Shares of payment processing giant PayPal have plunged 53.5% year-to-date. On February 2nd, it fell 25% in response to mixed Q421 results and weak guidance.
PayPal expects adjusted EPS to decline nearly 29% to $0.87 in the 122nd quarter and earnings to grow about 6% on a spot and foreign exchange neutral basis. Analysts expect adjusted EPS to decline 28% to $0.88 in the 122nd quarter and earnings to increase 6.2% to $6.41 billion.
The company’s full-year earnings guidance showed growth of 15% to 17% and adjusted EPS between $4.60 and $4.60 to $4.75 in 2021.
PayPal struggled against tough comparisons, slowing e-commerce growth, weak consumer spending among low-income consumers due to inflationary pressures, supply chain problems, and a proprietary managed payment system from eBay.
Ahead of the first quarter print (due April 27), Morgan Stanley analyst James Faucette said: , which we believe is largely related to slower-than-expected growth in broader e-commerce than PYPL-specific factors. “
Faucette repeated the purchase rating and $190 price target on PayPal.
Overall, Street is cautiously optimistic about PayPal, exhibiting a moderate buy consensus rating based on 29 purchases, 10 holds, and 1 sale. An average PayPal price target of $167.86 suggests a potential upside of 91.23% from current levels.
According to TipRanks’ website traffic tool, estimated total visits to the PayPal website increased by 125.81% year-over-year in Q122. Also, website traffic increased by 20.75% in Q122 compared to Q421. This marks a slowdown compared to the quarterly growth rate of 23.82% in website traffic seen in Q4 2021.
Domino’s Pizza (New York Stock Exchange: DPZ)
Domino’s Pizza stock has plunged about 33% so far this year. This is due to concerns that the tailwinds of the pandemic will weaken and business momentum will slow. Last month, the company released his fourth-quarter FY21 results (ending Jan. 2, 2022), which fell short of Wall Street’s expectations.
Domino’s fourth quarter 2021 revenue declined 1% to $1.34 billion. This is due to unfavorable currency fluctuations and staffing issues facing the company’s U.S. operations, particularly its shipping operations. Adjusted EPS increased about 23% to $4.25. This reflects the benefit of a lower share count due to the company’s share repurchase.
Domino’s plans to release first quarter 2022 results on April 28. The company did not provide specific guidance, but said it expects the headwinds of the fourth quarter of 2021 to continue into the first quarter. In addition, rising commodity costs and rising inflation are expected to impact profitability.
Analysts expect first-quarter 2022 earnings to grow 4.6% to $1.03 billion and adjusted EPS to rise 2.7% to $3.08.
Ahead of the first quarter results, UBS analyst Dennis Geiger lowered his price target on Domino from $475 to $430, maintaining a hold rating. Geiger feels staffing challenges and macro pressures continued in the first quarter and may have impacted Domino’s sales trends.
That said, Geiger believes there could be more momentum in the second half of the year due to higher staffing and driver levels coupled with higher prices.
Overall, Domino’s Pizza has a Medium Buy Consensus Rating based on 9 purchases, 13 holds, and 1 sale. Domino’s average price target of $456.50 suggests a potential upside of 20.72% from current levels.
According to TipRanks’ website traffic tool, total estimated visits to Domino’s websites increased by 101.22% year-over-year in Q122. Additionally, website traffic increased by 16.07% on a quarterly basis in Q122, marking an improvement from his 7.29% growth seen in Q421, possibly as a result of the Omicron outbreak. Management may shed some light on this in an upcoming conference call.
With the recent focus on online ordering in the food industry, it may be useful to evaluate website traffic data. More than half of Domino’s global retail sales in 2021 came from digital channels.
Conclusion
Some analysts continue to believe in PayPal’s growth story, but remain cautious due to multiple near-term headwinds, including slowing spending due to inflationary pressures and geopolitical tensions. TipRanks’ website traffic tool shows a continuous slowdown in his website traffic growth in Q1.
Persistent labor issues, lack of stimulus and unemployment benefits that boosted consumer demand last year, and inflation are expected to drag down Domino’s first quarter 2022 results. On the other hand, his website traffic trend in Q122 looks more favorable to Domino.
To learn more about website traffic tools, check out this video by YouTube sensation Tom Nash.
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