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What Are Wall Street's Top Analysts Saying About PayPal's Earnings?

What Are Wall Street's Top Analysts Saying About PayPal's Earnings?

Paypal Holdings Inc (NASDAQ: PYPL) reported on Wednesday its second-quarter results, which helped boost the stock to a new all-time high of $61.30 on Thursday. Here is a roundup of what some of Wall Street's top analysts are saying after the print.

Oppenheimer: 'Stellar' Quarter

Oppenheimer's Glenn Greene maintains an Outperform rating on eBay's stock with a price target raised from $50 to $65 after a "stellar" quarter. Of particular note, total payment volume grew 26 percent in part due to a 30 percent growth in CC Merchant Services.

Upside in operating margin was also a pleasant surprise as the company offset a higher transaction expense with "tight" operating expense management, the analyst added.

Overall, the strong quarter reinforces the analyst's stance that PayPal is in a "unique competitive position within the large online payments market."


Loop Capital: Signs Of Concerns

PayPal's earnings report marked another quarter of "solid" growth on the top and bottom line, Loop Capital's Joseph Vafi said in a research report. But beyond the headline numbers, there are many "moving parts" that are of particular concern. As such, the analyst maintains a Hold rating on PayPal's stock with a price target boosted from $49 to $51.

For example, PayPal's report showed a deterioration in both rate and transaction margins and this was only partially offset by fixed cost leverage, the analyst added. This adds to ongoing concerns that the offset scenario "can only continue for so long."

In fact, these concerns aren't necessarily a big deal they are still material and calls into question the stock's ability to support a premium multiple in the face of margin compression.

Stifel: Delivered On High Expectations

PayPal "delivered" in its earnings report amid high expectations, Stifel's Scott Devitt argued in a research report. The analyst maintains a Hold rating on PayPal's stock with a price target boosted from $51 to $61 after the report showed the company outperformed across many key metrics.

PayPal remains well positioned for sustainable long-term growth in the digital payment category through various initiatives, improved technology and infrastructure, and new verticals, Devitt added. But unfortunately, much of the future success is priced into the stock today. In fact, PayPal's multiple has even expanded ahead those of card networks, which implies the stock has limited upside ahead.


Baird: Another Beat And Raise Quarter

PayPal's earnings report signals future "promising trends" in user growth and engagement, Baird's Colin Sebastian said in a research report. These trends should support upside in the stock as the analyst maintains an Outperform rating with a price target boosted from $59 to $65.

    1. Customer choice.
    2. Expansion of agreements with Google (Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL)), Samsung Electronics (OTC: SSNLF), Apple Inc. (NASDAQ: AAPL).
    3. Bank tokenization.
    4. International expansion.
    5. Venmo monetization.
    6. An asset-light credit strategies.

PayPal is also expected to continue pursuing incremental strategic partnerships while at the same time maintaining a "disciplined" capital allocation strategy.

Citi: Momentum Remains Strong

PayPal's earnings report should be considered as being "good enough" to support upside in the stock on top of the already 30 percent gain in the past three months, Citi's Ashwin Shirvaikar argued in a research report.

The analyst maintains a Buy rating on the stock with a price target raised from $62 to $67 as it remains an attractive company poised for growth in the digital commerce space. The stock also remains attractive, especially on a free cash flow basis, the analyst added.

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Latest Ratings for PYPL

Oct 2019MaintainsOverweight
Oct 2019MaintainsOutperform
Oct 2019MaintainsOverweight

View More Analyst Ratings for PYPL
View the Latest Analyst Ratings

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