Shares in mobile payments group PayPal (PYPL) dialed-up higher in pre-market trading today as analysts gave the thumbs up to yesterday’s Investor Day.
PYPL stock was down 1.57% at the close of trading last night but has largely regained ground today. The negative reaction was mainly due to some skepticism over the group’s ambitious future targets set out at the meeting. This included an intention to get mobile payment app Venmo up to the $2 billion mark in revenue in 2027 and for adjusted earnings per share to climb 20% over the long-term. In addition, management reaffirmed its 2025 guidance calling for over 5% gross profit growth and 6%-10% adjusted earnings per share.
PayPal Bosses Too “Conservative”
However, four-star TipRanks-rated Dan Dolev, analyst at Mizuho Securities said the PayPal management team were in fact too conservative about overall group prospects. He said chief executive Alex Chriss, did not give enough attention to the company’s advertising opportunity. Dolev believes this could drive a 5% to 10% revenue boost over the medium-term.
In addition, he contends that investors have not given enough consideration to the revenue opportunity at PYPL’s Bill.com payments option, given that it has over 20 million small and medium sized business merchant clients. Dolev kept his Outperform rating and $96 price target on the stock.
Routes to Success
Fellow four-star TipRanks-rated Bryan Bergin, of TD Cowen said PayPal management had provided a “largely cohesive message as it aspires to be a broader commerce platform.” He said the group may have many routes to potential success such as Venmo, Smart Wallet and small and medium sized business lending. He maintained a Hold rating and a $83 price target.
Since Chriss joined the group in late 2023 PayPal’s stock has climbed by nearly 25%. Year to date, however, it is down 13%. This is largely due to concerns over growth at its branded checkout service and competition from rivals such as Apple’s (AAPL) product Apple Pay.
Is PYPL a Good Stock to Buy Now?
On TipRanks, PYPL has a Moderate Buy consensus based on 16 Buy and 14 Hold ratings. Its highest price target is $125. PYPL stock’s consensus price target is $96.04 implying an 29.66% upside.
