Despite Strong Results, PayPal Remains A 'Show Me' Story

Shares of Paypal Holdings Inc PYPL have been pretty stagnant in the weeks that followed its Q1 results, which included an earnings beat and several other figures that indicated strong demand and an ameliorating platform.

In a report issued Thursday, BTIG analysts Mark Palmer and Giuliano Bologna issued a Buy rating and $48 price target on the stock, arguing that its inability “to gain additional traction after showing that its fundamentals are pointing in the right direction again” served as a confirmation of their view that PayPal is a “show me” story, which “will need to further convince skeptics before it can break out meaningfully to the upside.”

But, investors shouldn't fall in despair, for the next catalyst could arrive next Wednesday, when the company hosts its analyst day. As per the note, analysts think management may utilize this event to “address many of the lingering questions that may be standing in the way of additional appreciation,” even as the stock is up roughly 9.2 percent year-to-date, vs. the S&P’s 0.7 percent gain.

In fact, given the strength seen in Square Inc SQ, a raise in PayPal’s full year guidance would come as no surprise.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.