PayPal: A Year of Strong Gains but Lags Behind ETF Competitors
Based in San Jose, California, PayPal Holdings, Inc. (PYPL) is a major player in the digital payments sector, providing a technology platform for merchants and consumers. Currently, its market capitalization is valued at $77.4 billion.
Over the past year, PayPal’s shares have significantly outperformed the broader market. Specifically, PYPL has increased by 39.3%, while the S&P 500 Index ($SPX) has seen a rise of about 31.1%. In 2024, the stock is up 27.2%, which exceeds the SPX’s rise of 19.8% year-to-date (YTD).
However, when comparing PYPL’s performance to the Gabelli Financial Services Opportunities ETF (GABF), the fintech giant falls short. The ETF has surged by approximately 51.5% over the past year, and its YTD gains of 36.7% also outpace those of PayPal.
PayPal’s solid performance can be attributed to its growth in Total Payment Volume (TPV) and its effective two-sided platform linking merchants with consumers. With data from 6.6 billion transactions last quarter, PayPal is proficient in data utilization, especially in areas like fraud detection. The increased monetization of Venmo, higher payment volumes, and improved take rates also contributed to the company’s success.
On October 29, PYPL’s shares fell by over 3% after the company announced its third-quarter earnings. The revenue reached $7.8 billion, a 5.8% increase compared to the previous year. Adjusted earnings per share (EPS) rose by 22.4% year over year to $1.20.
For the fiscal year ending in December, analysts predict a 20.6% growth in PYPL’s EPS, bringing it to $4.56 on a diluted basis. The company has consistently performed well, beating earnings estimates in each of the last four quarters.
Currently, among the 42 analysts covering PYPL stock, the consensus rating is a “Moderate Buy.” This includes 15 ratings of “Strong Buy,” two “Moderate Buys,” 24 “Holds,” and one “Strong Sell.”
This outlook is less optimistic compared to a month ago, when 16 analysts had rated it as a “Strong Buy.” On November 4, Barclays PLC (BCS) analyst Ramsey El Assal retained a “Buy” rating for PYPL with a price target of $92, suggesting a potential upside of 17.8% from its current price.
The average price target of $86.23 reflects a 10.4% premium to PYPL’s current price. Notably, the highest price target set by analysts is $125, indicating a possible upside of 60%.
More Stock Market News from Barchart
On the date of publication, Neha Panjwani did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
