Cathie Wood‘s investment management firm, ARK Invest, is betting big on PayPal (NASDAQ:PYPL), a digital payment platform provider, as it bought the company’s shares in the last two consecutive trading days. The move reflects the popular hedge fund manager’s growing confidence in the stock, backed by the robust momentum in the digital payment industry.
On May 24, Wood’s ARK Fintech Innovation ETF (ARKF) bought 54,210 shares of PYPL stock worth $3.34 million. Furthermore, on May 23, ARKF purchased another 100,167 shares of PayPal for a total value of $6.23 million.
PYPL: Here’s What Investors Need to Know
Wood’s bullish stance comes at a time when PYPL is expanding its offerings and strengthening its balance sheet. Moreover, the company is leveraging advanced AI technologies to enhance customer interactions and operational efficiency.
Investors should note that PayPal is currently undervalued. Its price-to-sales ratio of 2.17x is trading at a 16.7% discount from the sector median of 2.64 and 69.6% from the stock’s five-year average of 7.14. Perhaps it seems that Wood is taking advantage of this good entry point.
However, a quick look at the company’s website traffic suggests that PayPal might face headwinds due to intensifying competition in the digital payments landscape. After witnessing a sharp drop in November 2022, the company has been unable to lift its traffic to previous levels.
With this background, let’s look at what the Street suggests for PYPL stock.
What Is the Prediction for PYPL?
Overall, the stock has a Moderate Buy consensus rating based on 11 Buys and 15 Holds. The analysts’ average price target on PYPL stock is $72.38, implying an upside potential of 17.42% from current levels. In the past six months, shares of the company have gained by about 9%.
