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Investing.com -- Losing market share to Apple (NASDAQ:AAPL) Pay remains the largest overhang for PayPal (NASDAQ:PYPL), but Mizuho (NYSE:MFG) analyst believes these concerns may be overstated.
With more than 80% of PayPal’s pre-tax income coming from outside the U.S., international market trends—particularly Apple’s global position—are more critical to PayPal’s earnings than domestic dynamics.
According to Mizuho analyst Dan Dolev, Apple holds a much smaller share of the smartphone market in key PayPal regions such as Germany, France, and Italy, compared to its dominance in the U.S.
In Germany, iOS accounts for roughly 35% of the market, while in France and Italy, the share is closer to 25% and 30%, respectively.
He also pointed out that in seven of PayPal’s largest international markets, non-Apple devices have been gaining ground over the past 18 months.
“We believe these trends are key positives for PYPL that are unlikely factored into the current stock price,” Dolev said in a note.
Contrary to Apple Pay’s dominance in the U.S., Dolev highlighted that non-Apple devices represent about 65% of the market in Germany, 50% in the UK, and over 70% in Italy and France. This compares with the approximately 45% market share held by non-Apple smartphones in the U.S.
The analyst reiterated an Outperform rating on PayPal, setting a price target of $96, valuing the company at 17x its estimated 2026 earnings per share (EPS).
This valuation represents a modest premium compared to the median 2-year forward price-to-earnings multiple of legacy payments companies and is less than the historical premium that PayPal has traded at relative to its peers.