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PayPal: The Bull Vs. Bear Case

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PayPal: The Bull Vs. Bear Case

Moshe Katri of Sterne Agee CRT hosted 28 attendees to discuss the case for and against owning shares of Paypal Holdings Inc (NASDAQ: PYPL).

Katri noted that the bulls outnumbered the bears and were also "more vocal" on their opinion. Topics of conversation included competitive pressure, Venmo usage and monetization, among others.

"The presence of near-term momentum (Venmo growth, One Touch, potential Visa agreement and secular tailwinds from e-commerce) behind the stock seems to have kept the short sellers at bay, despite the mention of numerous concerns and threats (Mobile Wallets, Mobile penetration, loyalty costs, reduced ACH usage)," the analyst wrote.

Related Link: Don't Worry About PayPal Just Yet: JPMorgan

Here are some of the key points made by the bulls:

  • Paypal's user base consists of 158 million users versus the 9 million user base of Apple Inc. (NASDAQ: AAPL)'s Apple Pay and the 10 million base of Visa Inc (NYSE: V)'s Visa Checkout.
  • Not all iPhone users make use of Apple Pay on their phone.
  • Paypal is less expensive for merchants given its size.
  • Merchants prefer Paypal over credit cards given its incremental security features and ease of use.
  • Merchants may just want one button for checkout—Paypal's

Here are some of the key points made by the bears:

  • Paypal doesn't have a rewards program to incentivize users to use its payment platform over credit cards.
  • iPhone users make up only 20 percent of phones in the world, but iPhone users also spend more money on average.
  • "If you neutralize PYPL's value proposition on desktop and all others catch up, then they are crushed."

Latest Ratings for PYPL

DateFirmActionFromTo
Sep 2019MaintainsOutperform
Sep 2019ReiteratesBuy
Sep 2019UpgradesHoldBuy

View More Analyst Ratings for PYPL
View the Latest Analyst Ratings

Posted-In: Apple Pay Moshe Katri Online Payment Processors PayPalAnalyst Color Analyst Ratings Tech Trading Ideas

 

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