If You Invested $1,000 In PayPal Stock One Year Ago, Here's How Much You'd Have Now

Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 ETF Trust SPY total return over the last 12 months is 31.2%. But there is no question some big-name stocks performed better than others along the way.

PayPal’s Big Run: One company that has been a solid investment in the last year has been digital payments giant Paypal Holdings Inc PYPL.

Unlike many other companies, the COVID-19 pandemic in 2020 didn’t hurt PayPal’s business. In 2019, PayPal reported $2.07 in adjusted EPS on $17.7 billion in revenue. In 2020, EPS jumped to $3.54 and revenue grew to $21.4 billion.

In fact, economic shutdowns around the world facilitated a broad shift from cash toward digital payments, creating a tailwind for PayPal and other online and mobile payment apps. The more than $6 trillion in U.S. government stimulus measures also triggered concerns over rising inflation levels.

As a result, cryptocurrency prices soared, which was great news for PayPal’s Bitcoin BTC/USD business. Bank of America has estimated PayPal will generate $123 million in revenue from cryptocurrency trading in 2021. PayPal is also reportedly exploring a stock trading service to take advantage of the recent boom in retail trading.

At the beginning of 2020, PayPal shares were trading at $110.75. By the beginning of March, the stock was up to $112.86 despite news of the coronavirus spreading in China prompting concerns about a U.S. pandemic.

PayPal bottomed at $82.07 during the pandemic-driven March sell-off. Fortunately for PayPal investors, the dip did not last long.

By early May, PayPal shares were back at new all-time highs above $140, but PayPal wasn’t done there. By August, PayPal had made it above $200 for the first time.

Related Link: If You Invested $1,000 In Genius Brands Stock One Year Ago, Here's How Much You'd Have Now

PayPal In 2021, Beyond: PayPal ultimately made it to a new all-time high of $309.14 in February 2021 before pulling back to as low as $227.52 in March. The stock hit a new high of $310.16 in July before a disappointing second-quarter earnings report sent the stock back down to around $287 today.

A continuing rally in cryptocurrency prices or a major push into stock trading could send PayPal to new all-time highs in the coming months. In addition, the transition of eBay Inc EBAY will remove a major headwind for PayPal revenue growth in the coming quarters. PayPal is also planning to launch a new digital wallet “super app,” which will feature bill pay, direct deposit and high-yield savings services.

At the same time, potential rotation out of growth stocks and into value stocks could weigh on PayPal’s performance. The stock currently trades at 13.9 times sales and 48.8 times forward earnings, suggesting some very high expectations are already priced in.

Still, PayPal investors who bought one year ago and held on have generated a nice return on their investment. In fact, $1,000 in PayPal stock bought on Sept. 1, 2020, would be worth about $1,414 today.

Looking ahead, analysts are expecting more upside for PayPal in the next 12 months. The average price target among the 40 analysts covering the stock is $330, suggesting a 14.7% upside from current levels.

Photo: Courtesy PayPal

Posted In: CryptoDigital WalletsFintechEducationGeneral

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.