Stock of the Day

August 13, 2024

PayPal (PYPL)

$74.95
-$2.68 (-3.5%)
Market Cap: $76.79B

About PayPal

PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It operates a two-sided network at scale that connects merchants and consumers that enables its customers to connect, transact, and send and receive payments through online and in person, as well as transfer and withdraw funds using various funding sources, such as bank accounts, PayPal or Venmo account balance, PayPal and Venmo branded credit products comprising its installment products, credit and debit cards, and cryptocurrencies, as well as other stored value products, including gift cards and eligible rewards. The company provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company was founded in 1998 and is headquartered in San Jose, California.

PayPal Bull Case

Here are some ways that investors could benefit from investing in PayPal Holdings, Inc.:

  • Recent upgrades from major financial institutions, such as JPMorgan Chase raising the price target to $90.00 and Bank of America increasing it to $103.00, indicate strong confidence in the stock's potential for growth.
  • The current stock price of $77.97 presents a potential buying opportunity, especially considering the average price target of $90.52, suggesting a possible upside for investors.
  • PayPal Holdings, Inc. reported a quarterly earnings per share (EPS) of $1.19, exceeding analyst expectations, which reflects strong operational performance and profitability.
  • The company has shown a year-over-year revenue growth of 4.2%, indicating resilience and the ability to expand its market presence despite economic challenges.
  • With a market capitalization of $77.13 billion and a P/E ratio of 19.44, the stock is positioned within a reasonable valuation range, making it attractive for long-term investors.

PayPal Bear Case

Investors should be bearish about investing in PayPal Holdings, Inc. for these reasons:

  • The stock has experienced significant volatility, with a 52-week high of $93.66 and a low of $56.97, which may deter risk-averse investors.
  • Despite recent earnings growth, the EPS has decreased from $1.48 in the same quarter last year, indicating potential challenges in maintaining profitability.
  • Thirteen analysts have rated the stock as a hold, suggesting that there may be uncertainty about its future performance compared to other investment opportunities.
  • The company's beta of 1.44 indicates higher volatility compared to the market, which could lead to larger price swings and increased risk for investors.
  • With a net margin of 13.04%, there may be concerns about the company's ability to sustain profitability in a competitive digital payments landscape.

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