’Reddit is built for this moment’ - Stock soars on crushed earnings
On Monday, Bernstein SocGen Group maintained its Market Perform rating on PayPal (NASDAQ:PYPL) shares, with a steady price target of $94.00. Currently trading at $70.19, PayPal has seen its stock decline nearly 18% year-to-date, according to InvestingPro data, which notes significant price volatility as a key characteristic of the stock. The research firm’s analysis emphasized the importance of PayPal’s international branded business, which has been somewhat overshadowed by the focus on U.S. branded volumes. Despite a 20%+ drop in PayPal stock since the fourth-quarter results, Bernstein believes that international markets are crucial for the company’s branded business growth.
PayPal’s management outlined an ambitious target during their Investor Relations day in February to boost branded Total (EPA:TTEF) Payment Volume (TPV) growth from the current 6% to 8-10% by 2027. With current revenue of $31.8 billion and a 6.8% growth rate, according to InvestingPro data, the company’s international expansion strategy will be crucial for achieving these targets. While the U.S. market is part of this growth strategy, Bernstein points out that international expansion is likely to play a more significant role.
The firm’s commentary included insights into PayPal’s international operations, including country-level exposures and market share dynamics. Analysts noted that while there is considerable attention on the growth of alternative payment methods and Secure Remote Commerce (SRC) dynamics in Europe, PayPal is also enhancing its platform by introducing modern experiences that improve conversion rates and rolling out Near Field Communication (NFC) capabilities, especially as Apple (NASDAQ:AAPL) has opened up access to these technologies.
Bernstein expects that the European payments market will become a key area of competition for PayPal in the years 2025 and 2026. Through this analysis, the firm suggests that investors should closely monitor the health of PayPal’s branded business abroad for a long-term perspective on the company’s performance. With a market capitalization of $69.4 billion and strong profitability metrics, PayPal maintains its position as a prominent player in the financial services industry. Discover more detailed insights and 7 additional ProTips about PayPal’s valuation and growth potential with an InvestingPro subscription.
In other recent news, PayPal Holdings has made significant financial and strategic moves. The company issued $1.5 billion in senior notes across three series, with varying maturity dates and interest rates, as noted in a recent SEC filing. The notes are unsecured senior obligations, and PayPal has not disclosed the intended use of the proceeds. In a strategic move, PayPal appointed Joy Chik to its Board of Directors, bringing her extensive experience in technology and AI from her current role at Microsoft (NASDAQ:MSFT). This addition is part of PayPal’s strategy to integrate artificial intelligence into its offerings.
Additionally, analysts have recently provided updates on PayPal’s stock. Piper Sandler cut its price target for PayPal to $76 while maintaining a Neutral rating, following insights from PayPal’s Investor Day. Meanwhile, TD Cowen maintained a Hold rating with an $83 price target, reflecting on PayPal’s ambitious plans to expand its commerce platform. PayPal has reiterated its financial guidance for fiscal year 2025 and set new targets for 2027, aiming for significant growth in transaction margin dollars and earnings per share. The company continues to focus on strategic initiatives like scaling its Omni platform and expanding Venmo usage.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.