PayPal stock rose after the company reported revenue and adjusted earnings that topped analysts’ estimates and lifted its full-year guidance. Chief Executive Officer Enrique Lores also said the board would consider alternatives that could deliver greater shareholder value, without endorsing any specific takeover proposal.

PayPal shares climbed to a multi-month high near $58.60 following the stronger second-quarter results. Before Tuesday’s session, PYPL had gained about 51% from its year-to-date low. The stock also moved closer to the reported $60.50-per-share offer from Stripe and Advent International, adding a takeover angle to a results-driven move that was already supported by better-than-expected numbers.

Lores did not back the proposal, but he said the board would objectively evaluate options that create more value for shareholders. The remarks, along with the improved outlook, supported the stock in Tuesday trading.

PayPal Reports Higher Revenue and Raises Outlook

In a statement, PayPal said its revenue growth remained slow, but still improved last quarter. Revenue rose 5% to $8.7 billion, beating analysts’ expectations.

The increase came as total payment volume climbed 10% to $486 billion. Transaction margin rose modestly to $3.9 billion, while earnings per share slipped slightly to $1.38.

The company also pointed to several challenges. Active accounts were essentially flat at 439 million, with active accounts increasing by just 1%. Transactions per active account rose only 3%.

Although revenue was stronger than expected, it remained modest relative to other companies’ results. A recent FactSet report said the S&P 500 Index is experiencing one of its best years, with average earnings growth above 37%.

PayPal also raised forward guidance. The company now expects third-quarter transaction margin to be slightly positive, with earnings per share growth in the low single digits. For investors, that makes the quarter important not just because it beat estimates, but because it showed management is trying to stabilize growth while preserving profitability.

CEO Says the Board Will Consider Value-Enhancing Options

PayPal shares also advanced after Lores made his first public comments on the reported takeover interest from Stripe and Advent International. The recently appointed chief executive said he was open to opportunities that would create value for investors.

That leaves several paths for the company. PayPal could accept the Stripe offer, push Stripe and Advent to raise their bid, or seek additional buyers. A broader sale process could also support the stock if more suitors emerge.

PayPal remains a large business with more than 439 million customers and a valuation that some investors view as low. The company’s forward price-to-earnings ratio is 10, below the technology sector median of 24 and well under its five-year average of 25.

The company also holds over $8.3 billion in cash and cash equivalents, $2.9 billion in short-term investments, and more than $4 billion in long-term investments. Against that, PayPal has $10 billion in long-term debt.

Potential buyers could also look for ways to unlock value through asset separation. One possibility would be spinning off Venmo, which has become a key consumer product, into a separate company. Another would be separating some of PayPal’s other consumer products.

Technical Indicators Point Higher

From a technical perspective, PayPal stock has formed a double-bottom pattern at $40.45, its lowest level in February and June this year.

The shares have since moved above the $52.20 neckline, which was the high in May, and have also climbed above the 50-day Exponential Moving Average (EMA). PYPL has additionally moved above the Supertrend indicator, which is generally viewed as a bullish signal.

If the stock continues higher, the next key level to watch is $70, about 21% above the current level.

FactSet earnings insight

PayPal stock forecast amid surfacing Stripe acquisition rumors

Bloomberg: PayPal CEO says would consider opportunities for greater value