Susquehanna cuts PayPal price target to $94, keeps positive rating

Published 09/04/2025, 13:18
Susquehanna cuts PayPal price target to $94, keeps positive rating

Wednesday, Susquehanna analysts maintained a Positive rating on PayPal (NASDAQ:PYPL) shares but reduced the price target from $101.00 to $94.00. The adjustment reflects the need to account for macroeconomic volatility, despite the firm's favorable view of PayPal's strategic initiatives. Currently trading at $57.41, PayPal's stock has experienced significant pressure, down nearly 33% year-to-date. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value estimates.

Analysts at Susquehanna recently engaged with PayPal to discuss various aspects of the company's 2025 Investor Day strategy, including Branded Checkout, Venmo, and the PayPal Commerce Platform (PCP). The discussions reinforced the analysts' perception of PayPal as a "self-help" story with a sensible approach. InvestingPro data shows PayPal maintains a GOOD financial health score, with particularly strong metrics in profitability and growth potential.

However, the analysts noted that it was necessary to revise their financial model for PayPal due to the macroeconomic environment, a decision made independently from their meeting with the company. They emphasized that the revised price target is a result of their own analysis and not influenced by the company's input.

The report highlighted PayPal's business model, which primarily generates revenue through transaction fees or take rates. This model tends to benefit when prices increase. Nevertheless, as PayPal operates significantly within discretionary spending sectors, there is a potential risk if consumer purchasing power declines, which could lead to pressure on the company's performance. The company has demonstrated resilience with revenue growth of 6.81% and maintains healthy profit margins of 40.54%. For deeper insights into PayPal's financial metrics and growth potential, access the comprehensive Pro Research Report available on InvestingPro.

The analysts also mentioned that they converted volume and revenue-based analysis to transaction margin dollars using network disclosures. Their research indicated that e-commerce has higher take rates compared to other sectors, which informed their decision to lower their estimates and the price target for PayPal's stock.

In conclusion, despite the reduction in the price target to $94, Susquehanna's outlook for PayPal remains positive, underpinned by the company's valuation and strategic direction. With a P/E ratio of 14.25 and strong cash flow generation, PayPal continues to demonstrate fundamental strength despite recent market pressures.

In other recent news, PayPal Holdings Inc . has made several notable announcements. The company has expanded its cryptocurrency offerings by integrating Chainlink and Solana into its digital wallet services, allowing users to buy, hold, sell, and transfer these cryptocurrencies directly. This move is part of PayPal's strategy to enhance its digital currency services in response to customer demand for more diverse options. Additionally, Mizuho (NYSE:MFG) Securities has maintained its Outperform rating for PayPal, with a price target of $96.00, citing consistent growth in the company's Branded Checkout Total (EPA:TTEF) Payment Volume. Meanwhile, Evercore ISI initiated coverage on PayPal with an In Line rating and set a price target of $65.00, highlighting the company's significant assets but also noting challenges due to macroeconomic factors. PayPal is also set to launch its advertising platform in the UK, following its initial rollout in the United States. Furthermore, Rodney C. Adkins, a member of PayPal's Board of Directors, will retire in June 2025, after contributing significantly to the company's strategic direction.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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