Market Overview

2 Questions PayPal's Management Need To Answer

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On May 18, Paypal Holdings Inc (NASDAQ: PYPL) is scheduled to host its first Analyst Day since spinning out of eBay Inc (NASDAQ: EBAY) in 2015. Cantor Fitzgerald’s Youssef Squali maintained a Buy rating for PayPal, with a price target of $48.

PayPal has a new management team and an expanded strategy, while facing an ever-changing competitive backdrop. Given these factors, the Analyst Day would be “an important opportunity” for management to provide details of its refined strategy and how it plans to address key industry issues, while also providing insight into its long-term financial goals, analyst Youssef Squali said.

“Management's execution to-date has been very strong and the opportunity ahead of it remains substantial, in our view,” Squali wrote.

2 Questions

Given the highly competitive and rapidly evolving market, there are several questions and issues. The analyst highlighted two questions that need to be addressed:

  1. “With its goal of making Paypal a daily habit (vs. once every 2-3 weeks today), how does management see the contribution of core Paypal vs. newer initiatives including Braintree, Venom, Xoom and Paypal Credit?
  2. Given the company's increasingly diverse product offerings, what are management's long-term operating and FCF targets?”

Latest Ratings for PYPL

Oct 2016Stifel NicolausUpgradesHoldBuy
Oct 2016Evercore ISI GroupInitiates Coverage OnBuy
Oct 2016BarclaysMaintainsOverweight

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Posted-In: Cantor Fitzgerald Youssef SqualiAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas


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