PayPal Holdings Inc

Recommendation: Buy

Entry Date Symbol Recommendation Entry Price (USD) Target 1 (USD) Target 2 (USD) Holding Duration Potential Upside
29 Aug, 24 PYPL Buy USD 72.42 USD 80.6 USD 88.75 29 days 22.5%

Fundamentals

  • Previous Close 81.16
  • Market Cap64478.52M
  • Volume4312056
  • P/E Ratio15.53
  • Dividend Yield-%
  • EBITDA5659.00M
  • Revenue TTM30430.00M
  • Revenue Per Share TTM28.00
  • Gross Profit TTM 11653.00M
  • Diluted EPS TTM3.97

Data Powered by EOD Historical Data (“EODHD”).

Company Overview

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.

Key Positives

Lower Credit Risk Exposure: Debt-Equity of 0.53x in Q1 FY24 vs Industry Median of 0.85x

Increased Shareholders' Wealth: ROE of 4.3% in Q1 FY24 vs Industry Median of 3.4%

Key Negatives

Short-Term Profitability: Gross Margin of 39.1% in Q1 FY24 vs Industry Median of 56.2%

Lower Liquidity: Current Ratio of 1.28x in Q1 FY24 vs Industry Median of 1.37x

Key Investment Risks

Regulatory and Compliance Risks, Cybersecurity and Fraud Risks, Intense Competition, Integration Challenges, Technology and Platform Dependence, etc

Recommendation Summary

Technical Summary

Entry Price Support* Target 1 Target 2
72.42 60.5 80.6 88.75

Data Source: REFINITIV, Analysis: StockNextt

*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.

Key Reasons for Buy

PayPal's stock price has demonstrated remarkable strength by holding its ground at critical levels and initiating an upward move. The stock has now broken above a key falling trendline resistance zone, suggesting a potential further uptrend. The 14-period Relative Strength Index (RSI) is also trending upward and remains in positive territory, adding to the bullish momentum. Additionally, PayPal's stock price is now trading above both its 21-day and 50-day simple moving averages, further solidifying the optimistic outlook for the stock.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to PayPal Holdings, Inc. (NASDAQ: PYPL) its current market price of USD 72.42 as of Aug 29, 2024 (7:40 am PDT).

Key Financials in Pictures

Income Statement

Balance Sheet

Change in Cash

Total Operating Cash

Dividends Paid

Data Powered by EOD Historical Data (“EODHD”).

Peer Comparison

Sector: Financial Services Industry: Credit Services

Company Change (USD) Price (USD) Trailing PE (x) Forward PE (x) Price Sales TTM (x) Price to Book Value (x) Enterprise Value to Revenue (x) Enterprise Value to EBITDA (x)
PYPL
PayPal Holdings Inc
0.32 0.39% 81.47 15.53 12.61 2.28 3.23 2.14 9.31
V
Visa Inc. Class A
1.56 0.57% 276.52 31.25 25.97 16.18 13.64 16.19 23.37
MA
Mastercard Inc
3.11 0.63% 499.51 37.04 29.50 16.14 62.35 16.47 27.24
AXP
American Express Company
1.24 0.46% 270.35 17.39 14.58 2.42 4.82
COF
Capital One Financial Corporation
1.67 1.12% 151.17 9.72 9.87 1.85 0.91

Data Powered by EOD Historical Data (“EODHD”).

Disclosures:

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer :
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