Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

PayPal Shares at a 'Solid Entry Point' According to UBS

Published 06/15/2022, 08:17 AM
Updated 06/15/2022, 12:31 PM
© Reuters PayPal (PYPL) Shares at a 'Solid Entry Point' According to UBS

By Sam Boughedda

UBS analyst Rayna Kumar told investors in a note Wednesday that PayPal (NASDAQ:PYPL) could grow revenue at the high end of mid-teens beyond 2022.

UBS analyzed the company's mix and growth potential of its largest total payments volume components, including Core PayPal, Braintree, P2P, and eBay (NASDAQ:EBAY), following the removal of its medium-term guidance.

"We estimate Core PayPal and Braintree represent 52% and 17% of TPV, respectively, while, as disclosed by PayPal, P2P generates 28%, and eBay comprises the remaining 3%," said Kumar. "After examining growth rate potential for each, from 2022E to 2026E, we estimate PayPal can achieve a 16.6% revenue CAGR, assuming 17.7% TPV growth and 18.2% OVAS revenue gains, partially offset by a ~2% headwind from take rate pressure."

"With PayPal trading at just 14x our 2023E EPS (9% above consensus), the market does not appear to price-in such growth, providing a solid entry point for the shares, we believe."

The analyst reiterated a Buy rating and a $143 price target.

Latest comments

A buy to $143.00, a ****that's all there is in this expectation. $31.00 USD WILL show first.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.