Should you buy PayPal's stock right now? PayPal has survived the loss of eBay, weathered the inflationary headwinds, and is still squeezing more revenues from its existing users. From 2023 to 2026, analysts expect its revenue and EPS to grow at a compound annual growth rate of 6% and 11%, respectively.
Analysts project PayPal to increase EPS by 13% in 2024 and 11% in 2025, which would be market-beating growth. PYPL EPS estimates for next fiscal year; data by YCharts. If PayPal can steadily increase its earnings at a 12% annual pace and achieve a P/E pf 20, then a five-year projected stock price would be around $175.
PayPal is a sound financial enterprise, which reduces risk for investors. When it comes to the balance sheet, PayPal is in fine shape.
PayPal stock price forecast for January 2025. The forecast for beginning 85.35 dollars. Maximum price 91.39, minimum 72.64.
Based on short-term price targets offered by 35 analysts, the average price target for Paypal comes to $92.91. The forecasts range from a low of $70.00 to a high of $125.00. The average price target represents an increase of 5.65% from the last closing price of $87.94.
Future Growth
PayPal Holdings is forecast to grow earnings and revenue by 6.3% and 5.9% per annum respectively. EPS is expected to grow by 11.1% per annum. Return on equity is forecast to be 22.6% in 3 years.
For example, its payment processing fees are higher than that of other payment processors. The same holds true for chargebacks. Secondly, PayPal has strict terms and conditions, which means that user accounts can easily get suspended.
Reasons PayPal Drops Payment Accounts
The most common reason for PayPal to limit high-risk accounts is a high chargeback ratio. Ideally, every payment processor wants to deal with as few chargebacks as possible. However, when the ratio is over 2%, it's an instant red flag for any account provider, including PayPal.
PYPL has a P/S ratio of 2.28. This compares to its industry's average P/S of 2.66. These are only a few of the key metrics included in PayPal's strong Value grade, but they help show that the stock is likely undervalued right now.
After declining more than 80% from its 2021 high, PayPal (PYPL) stock is rising from the dead. And though it took more than a year of sideways action near the lows, it's not that surprising.
Inflation, rising interest rates, and other macro headwinds for consumer spending exacerbated its slowdown in 2023. Data source: PayPal. The biggest problem for PayPal is its inability to gain more active accounts.
Following the abrupt end of the hyper-bullish pandemic-driven scenario, the stock fell into a period of underperformance, becoming what many saw as a value trap. Today, the investment thesis for PayPal is different, centered on moderate growth and an attractive valuation relative to its return potential.
Paying through PayPal is about as safe as paying using a credit card, but there are indirect advantages to using PayPal. Merchants won't see your credit card information if you use PayPal, for example, thus reducing the risk of data exposure.
From a fundamental perspective, SoFi's business is doing quite well, as customers, revenue, and profits grow. Maybe the best move for existing investors that are still bullish is to simply hold the stock to remain in a position to capture the company's potential success in the years to come.
PayPal helps keep transactions secure by not sharing financial information with sellers and also monitors transactions 24/7. Popular alternatives to PayPal include Venmo, Apple Pay, Stripe, and Skrill.
Even with PayPal's strong security measures, hackers and malware can slip through the cracks.
PayPal is a financial technology company, not a bank, and is not FDIC-insured.
If you want to withdraw money to your debit card, you'll pay a fee of 2% of the value of the withdrawal, with minimum and maximum fee amounts set by currency.
However, PayPal may be considered more secure for online transactions, as you can pay for goods and services using just your email address. In this way, PayPal acts as an intermediary for your transactions, keeping your bank details safe.
The financial health and growth prospects of PYPL, demonstrate its potential to outperform the market. It currently has a Growth Score of C. Recent price changes and earnings estimate revisions indicate this would be a good stock for momentum investors with a Momentum Score of B.
Musk no longer holds a stake in PayPal. He exited his position after the sale of the company and used his proceeds to fund investments including SpaceX, Tesla, and SolarCity.
Vanguard owns the most shares of PayPal Holdings (PYPL).