The Federal Reserve (Fed) has cut interest rates again, making it the third straight cut over the past three meetings this year. There are now a lot of implications that will flow from this last pivot as it makes its way through the economy. One thing is certain: Stocks that facilitate this shift are likely to see their prices rise.
This is where the business services sector comes into play, as currency fluctuations and interest rates will inevitably affect the purchasing power of local businesses and consumers, as well as those operating in foreign markets. While you like online platforms Shopify company New York Stock Exchange: Shop It may be at the forefront of investors’ minds, but vertical plays like payment processors are still not popular enough.
PayPal today
(As of 12/20/2024 at 05:45 PM ET)
- 52 week range
- $55.77
▼
$93.66
- P/E ratio
- 20.79
- Price target
- $88.42
This is exactly why shares PayPal Holdings Company Nasdaq: BPL It is an attractive proposition today; The company’s services will be in the eye of the storm in the coming months as online business and fulfillment activity begins to soar and creates more demand.
Wall Street analysts and some institutional investors may agree, but before investors learn about these facts, they must start by understanding what’s driving PayPal stock right now.
Quarterly results show the way for PayPal
During the past quarter, PayPal’s investor presentation It shows some key trends that are building further momentum and upside in the stock. Now that the stock is trading at 96% of its 52-week high, the media is ready to pick on PayPal’s key performance indicators (KPIs) when a falling stock price renders them worthless.
Here are some KPIs that investors should remember today, starting with Total Payment Volume (TPV). TPV has risen as much as 9% over the past 12 months, far from the number expected to come from the business slowdown and a metric that will certainly continue to expand in this new business cycle.
Then there’s the revenue generated from these transactions, which is $7.8 billion, or 6% more than the previous year. Investors can be confident in this result because PayPal’s monthly active accounts, which just reached 223 million, increased 2%, accompanied by an impressive 61.4 million transactions per active account, up 9% over the past 12 months.
It appears that as inflationary pressures continue in the US economy, more and more consumers are looking to mitigate their costs by purchasing more products through these online platforms, which mostly rely on PayPal for payment processing.
Furthermore, the need to have a freelance job or secondary income online to supplement times of inflation also helps PayPal, as most of these online jobs also rely on PayPal for their payment processing services.
Wall Street analysts like and approve of PayPal’s trends
Although PayPal is up as much as 46% over the past 12 months, Wall Street analysts still believe this company can achieve another double-digit rise. Staff at Macquarie and Barclays have decided to make their optimistic views public in recent weeks.
PayPal stock forecast today
$88.42
1.48% upModerate purchase
Based on 36 analyst ratings
| High expectations | $115.00 |
|---|---|
| Average expectations | $88.42 |
| Low expectations | $60.00 |
PayPal stock forecast details
As of December 2024, Barclays analysts maintain an overweight rating on PayPal shares with a valuation of $110 per share. From Macquarie, ratings look more like outperform and a stock price target of $115; Taking these last two opinions into account, investors face a net upside of 28.7% to 34.5%, respectively.
All of these bullish factors may be why investors are noticing that as much as $5.7 billion in institutional capital has made its way into PayPal shares over the past 12 months, fueled by expectations of higher prices ahead. Naturally, these expectations go beyond analyst ratings and price action; There are numbers to back them up.
For example, these same analysts are now forecasting up to $1.27 in earnings per share (EPS) for the same quarter next year, up from their current consensus of $1.07. Achieving a growth rate of up to 19% in earnings per share is enough to make the stock price test new highs.
The cherry on top for investors comes from PayPal’s stock valuation compared to its peers today. On a price-to-book multiple basis, PayPal’s valuation of 4.8x would be well below the PC industry average of 7.8x today, a discount that makes PayPal a great risk-reward setup considering the growth and inherent upside. In it today.
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