Paypal Holdings Inc PYPL has pushed into the cryptocurrency market as part of its growth plan. An analyst is out with some estimates of what cryptocurrency could mean for the company.
The Paypal Analyst: Bank of America analyst Jason Kupferberg reiterates a Buy rating and has a price target of $323.
The Paypal Takeaways: Kupferberg estimates a base case of the cryptocurrency segment for PayPal adding $123 million in revenue and $.03 in earnings per share in fiscal 2021.
“Crypto trading alone likely not a needle mover in ’21,” Kupferberg said.
The analyst does not estimate the crypto impact past fiscal 2021. The updated note includes a call for the soon-to-be-launched pay with crypto service as a potential catalyst.
“We suspect these benefits could be material over time," the analyst said, noting that 50% of PayPal users who have already adopted crypto trading are opening the PayPal app on a daily basis.
The crypto trading feature will be expanded to the Venmo app and to other countries in the future, which could lead to an increase in the analyst’s estimate.
See also: Best Cryptocurrency Apps
Kupferberg is comfortable with the first quarter estimates from the company and believes shares could be a buying opportunity on the latest dip. The risk for shares is the market rotation out of growth stocks.
Kupferberg calls PayPal the best pure play stock on the growth of ecommerce.
Related Link: Paypal CEO Says It’s Making It Easier To Bolster The Utility Of Cryptocurrency
Crypto Acquisition: On Monday, PayPal announced the acquisition of Curv, a leading provider of cloud-based infrastructure for digital asset security. The acquisition will support the cryptocurrency acceleration for PayPal.
“The acquisition of Curv is part of our effort to invest in talent and technology to realize our vision for a more inclusive financial system,” said Jose Fernandez da Pointe, vice president of blockchain, crypto and digital currencies at PayPal.
Price Action: Shares of PayPal are down slightly to $238.01 on Monday.
(Photo: PayPal)
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