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20 hours ago
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Why Paypal (PYPL) is a Top Value Stock for the Long-Term
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike. Achieving those goals is made easier with the Zacks Style Scores, a unique set of guidelines that rates stocks based on popular investing methodologies, namely value, growth, and momentum. The Style Scores can help you narrow down which stocks are better for your portfolio and which ones can beat the market over the long-term. Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks. PayPal has emerged as one of the largest online payment solutions providers on the back of its strong product portfolio and two-sided platform that enables it to offer smooth and secure transaction facility to both customers and merchants. PYPL is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of B. Shares are currently trading at a forward P/E of 14X for the current fiscal year compared to the Financial Transaction Services industry's P/E of 15.3X. Additionally, PYPL has a PEG Ratio of 1.2 and a Price/Cash Flow ratio of 12.8X. Value investors should also note PYPL's Price/Sales ratio of 2.2X. A company's earnings performance is important for value investors as well. For fiscal 2025, 11 analysts revised their earnings estimate higher in the last 60 days for PYPL, while the Zacks Consensus Estimate has increased $0.07 to $5.08 per share. PYPL also holds an average earnings surprise of 14%. Investors should take the time to consider PYPL for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
7 days ago
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Why Paypal (PYPL) is a Top Growth Stock for the Long-Term
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike. Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum. Different than value or momentum investors, growth-oriented investors are concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, they'll want to focus on the Growth Style Score, which analyzes characteristics like projected and historical earnings, sales, and cash flow to find stocks that will see sustainable growth over time. PayPal has emerged as one of the largest online payment solutions providers on the back of its strong product portfolio and two-sided platform that enables it to offer smooth and secure transaction facility to both customers and merchants. PYPL is a Zacks Rank #3 (Hold) stock, with a Growth Style Score of B and VGM Score of A. Earnings are expected to grow 9.3% year-over-year for the current fiscal year, with sales growth of 3.2%. 11 analysts revised their earnings estimate upwards in the last 60 days for fiscal 2025. The Zacks Consensus Estimate has increased $0.05 to $5.08 per share. PYPL boasts an average earnings surprise of 14%. Looking at cash flow, Paypal is expected to report cash flow growth of 13.2% this year; PYPL has generated cash flow growth of 7.7% over the past three to five years. PYPL should be on investors' short lists because of its impressive growth fundamentals, a good Zacks Rank, and strong Growth and VGM Style Scores. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
23-05-2025
- Business
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Why Paypal (PYPL) is a Top Momentum Stock for the Long-Term
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Achieving those goals is made easier with the Zacks Style Scores, a unique set of guidelines that rates stocks based on popular investing methodologies, namely value, growth, and momentum. The Style Scores can help you narrow down which stocks are better for your portfolio and which ones can beat the market over the long-term. Momentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks. PayPal has emerged as one of the largest online payment solutions providers on the back of its strong product portfolio and two-sided platform that enables it to offer smooth and secure transaction facility to both customers and merchants. PYPL is a Zacks Rank #3 (Hold) stock, with a Momentum Style Score of A and VGM Score of A. Shares are down 1.4% over the past one week and up 14.7% over the past four weeks. PYPL has gained 15.2% in the last one-year period as well. Looking at trading volume, an average of 10,004,259 shares exchanged hands over the last 20 trading days. A company's earnings performance is important for momentum investors as well. For fiscal 2025, 11 analysts revised their earnings estimate higher in the last 60 days for PYPL, while the Zacks Consensus Estimate has increased $0.05 to $5.08 per share. PYPL also boasts an average earnings surprise of 14%. PYPL should be on investors' short list because of its impressive earnings fundamentals, a good Zacks Rank, and strong Momentum and VGM Style Scores. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Business
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PayPal vs. Block: Which Fintech Stock is a Stronger Buy Right Now?
PayPal PYPL and Block XYZ are well-known providers of digital payments in the rapidly evolving fintech sector. Both offer peer-to-peer payments, Buy Now Pay Later (BNPL) solutions and a cryptocurrency buy-sell platform. An expanding portfolio and rich partner base make both PayPal and Block well-positioned to address the growing needs of the global fintech market. Artificial intelligence and machine learning are bringing rapid changes in the fintech market with growing demand for digital wallets, tokenization and account-to-account transactions. So, PYPL or XYZ, which of these Fintech stocks has the greater upside potential? Let's find out. Portfolio strength has been helping PayPal maintain deep and trusted relationships with merchants and consumers. Its two-sided platform helps develop direct financial relationships with customers and merchants. PYPL's investments in improving branded checkout, person-to-person (P2P) and Venmo are helping in driving total active accounts. The company's gradual evolution from a payments company to a commerce platform bodes well for first-quarter 2025, transaction margin dollars grew 7% year over year to $3.72 billion, driven by omnichannel commerce, both online branded checkout and offline branded payment methods, Venmo, and Payment Service Provider (PSP). Venmo revenues grew 20% and accounted for 18% of Total Payment Volume (TPV). PayPal expects transaction margin in dollar terms (ex-interest on customer balances) to grow between 4% and 5% in saw BNPL volume growth of more than 20% in the first quarter, and monthly active accounts grew 18% year-over-year. PYPL stated that BNPL users spend 33% more on average and conduct 17% more transactions. PayPal plans to increase consumer awareness of its BNPL solutions through campaigns in the United Kingdom and Germany, with continuing investments in Australia, France, Italy and Spain. The company's omnichannel strategy has been a success in the United States, and PayPal plans to replicate that internationally. The company remains on track to launch NFC capabilities in Germany later this quarter and bring PayPal everywhere to the United Kingdom in the third quarter of expanding partner base, including Fiserv, Adyen, Amazon, Global Payments and Shopify, is also driving prospects. Block's comprehensive commerce ecosystem, which enables sellers to combine software, hardware and payment services to accept payments from customers, helps it sustain solid momentum across sellers. The company's omnichannel offerings, which help sellers create differentiated customer experiences on the back of customer insights by managing orders from POS and eliminating manual aggregation of online and in-person orders, are adding strength to its seller base. Block is expanding its portfolio with the new Square POS app that integrates domain-specific commerce and payments functionality into a single, unified app that allows sellers to personalize their offerings. The latest Square Point of Sale app offers seven modes that are purpose-built for different Block has been suffering from a shift in consumer spending. Cash App Card spending in the first quarter of 2025 suffered from lower discretionary spending in areas like travel and media. Challenging macroeconomic conditions don't bode well for Block's near-term prospects. Gross profit, which grew 9% year over year in the first quarter of 2025, is now expected to grow 9.5% in the second quarter and accelerate in the second half of 2025, with double-digit growth in third-quarter 2025 and mid-teens in fourth-quarter. Year to date, PayPal shares have dropped 16.2%, outperforming Block shares, which have lost 33%. Image Source: Zacks Investment Research PayPal shares are trading cheap, as suggested by a Value Score of B, while Block shares are currently overvalued, as suggested by a Value Score of terms of forward 12-month Price/Sales, Block shares are trading at 1.37X, lower than PayPal's 2.07X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for PayPal's 2025 earnings is pegged at $5.07 per share, which has increased by 1.2% over the past 30 days. This indicates a 9.03% increase year over year. PayPal Holdings, Inc. price-consensus-chart | PayPal Holdings, Inc. Quote The consensus mark for XYZ's 2025 earnings is pegged at $2.72 per share, which dropped 30.4% over the past 30 days. This indicates a 19.29% decline year over year. Block, Inc. price-consensus-chart | Block, Inc. Quote PayPal earnings beat the Zacks Consensus Estimate in all the trailing four quarters, while XYZ has missed twice. PYPL's average surprise of 14.01% is better than XYZ's negative surprise of 7.11%, reflecting PayPal's good quality of earnings beat on a consistent basis. Although Block's rich partner base and expanding portfolio are noteworthy for investors, it suffers from challenging macroeconomic conditions in the near term. PayPal's strong portfolio with growing Venmo, BNPL and PSP businesses offers better growth opportunities in the near PayPal has a Zacks Rank #3 (Hold), making the stock a stronger pick compared with Block, which has a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report Block, Inc. (XYZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
14-05-2025
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PayPal (PYPL) Unleashes ‘Agentic Commerce' Following Benign SEC Probe and Solid Q1
PayPal Holdings (PYPL) stock is marching higher following the end of a highly contentious SEC probe. Since announcing the end of the SEC's investigation at the start of May, PYPL stock has climbed ~30%. For PayPal, the end of the SEC's probe removes a key regulatory overhang and paves the way for the leading tech platform to push deeper into blockchain-based payments and crypto. The company launched its branded stablecoin on the Ethereum network in 2023 as a dollar-pegged stablecoin backed by short-term U.S. Treasury bills. Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter Moreover, the good news on the regulator front coincided with the company's latest Q1 earnings results, which also supported PayPal's growth story, making me rather optimistic regarding PayPal's prospects. I'm particularly pleased with the payment pioneer's strategy to expand profitably, enhance the user experience, and monetize key platforms such as Venmo. Notably, PYPL is implementing so-called 'agentic commerce' to sustain its growth trajectory and appease shareholders clamoring for revenue growth. As a result, I'm staying bullish. Despite current concerns regarding the macroeconomy, management's cautious but consistent guidance and potential upside shifts from government policy anticipated in 2026 provide a reassuring outlook. With a tempting valuation at about 14x non-GAAP earnings, PayPal appears undervalued. PayPal reported strong Q1 2025 results, highlighting robust earnings even as revenue growth was subdued. Revenue increased a mere 1% year-over-year to $7.8 billion, but non-GAAP earnings per share surged 23%. And this was no coincidence, as PayPal consciously rebalanced its business model to focus on profitable transactions rather than volume growth. The benefit was evident in their operating margin, which increased by more than 250 basis points. What was encouraging was PayPal's smart choices in processing payments. While total payment transactions fell a bit, branded checkout transactions grew. Venmo also did well, with revenue growing 20%, driven largely by more users making purchases with debit cards and more merchants accepting Venmo as a form of payment. These metrics show that PayPal is growing strategically in areas that matter. Despite such strong results, PayPal was committed to conservative full-year guidance, projecting FY2025 adjusted EPS of $4.95 to $5.10. At first glance, that would seem cautious, but from my perspective, it's astute. By establishing reasonable targets in an uncertain macro backdrop, PayPal is giving itself room to beat the numbers down the track. Should consumer spending and online payments pick up modestly, this guidance provides ample room for upside surprises. PayPal's valuation looks very attractive today. It's trading at approximately 14x non-GAAP earnings, which is much less than many other fintech participants like Adyen (ADYYF), which is trading at over 50x. Given PayPal's powerful brand, profitable growth, and steady share buybacks, I find it reasonable to expect its non-GAAP price-to-earnings ratio to increase to approximately 17.5 by mid-2026. The company is also on track to achieve a trailing 12-month non-GAAP earnings per share of ~$5.25 for mid-2026. This situation would easily take PayPal's share price to around $90 in the next 12 months, a reasonable ~10% increase from its current position. On the macro front, I think that by 2026, strong positive economic trends could emerge thanks to the Trump government's and Treasury Secretary Scott Bessent's pro-growth policies. Their plan includes tax cuts, reducing red tape, and good trade policies, which could substantially accelerate U.S. economic activity, consumer spending, and business investment. For PayPal, this could mean increased transactions as consumers and businesses spend more online and offline. A very likely outcome is that interest rates will fall as inflation moderates, making consumers spend more. Reduced interest rates could also make investors more optimistic and push stock market prices higher, indirectly helping PayPal stock. Bessent believes interest rates will decrease naturally as the economy improves, paving the way for good market performance. Although some near-term problems may emerge in the international trade talks, PayPal's bullish medium-term outlook remains intact. PayPal is fueling future earnings growth through key strategic initiatives such as Fastlane checkout, Venmo monetization, and AI-driven commerce. Fastlane, designed to support small and mid-sized businesses, has scaled quickly and now accounts for roughly 50% of SMB checkout volume. In Q1, Fastlane merchants saw improved conversion rates and a 33% increase in product adoption, significantly boosting transaction margins. Venmo monetization also accelerated in Q1, with revenue rising 20% year-over-year. This growth was propelled by increased debit card spending—monthly active users grew by about 40%—and broader merchant acceptance. 'Pay with Venmo' volume surged over 50%, highlighting the platform's growing potential. As monetization deepens, Venmo could generate millions of dollars in annual revenue. Also, PayPal's initial move into AI-powered agentic commerce—AI agents making payments independently using PayPal's application programming interfaces—positions the company for long-term profitability in the $17 trillion autonomous transaction market by 2030. PayPal's repositioning toward profitable transactions differentiates it from competitors like Adyen, which remains focused on volume, and Stripe, which focuses on the breadth of its platform. This disciplined effort drove Q1 non-GAAP operating margin to 20.7%, positioning it for ongoing earnings growth and potential valuation expansion. On Wall Street, PayPal is a Moderate Buy. This consensus rating is based on 15 Buys, 16 Holds, and two Sell ratings obtained over the past three months. The average PYPL price target is $82.18, indicating ~13% upside potential over the next 12 months. This reaffirms that my $90 target is conservative and well within reach. The resolution of the SEC probe has removed a significant obstacle for PayPal, allowing the company to refocus on what it does best, particularly in blockchain and crypto. Just like online payments came to town in the late 1990s and PayPal took courageous steps to dominate, so too today. PayPal intends to carve out a strong position in the cryptosphere. Coupled with strong Q1 earnings and strategic initiatives like Venmo monetization and agentic commerce, PayPal is well-positioned for continued expansion. With these positive developments, the outlook remains bullish. To support the bullish projection, PayPal's Q1 2025 performance makes me confident about the company's trajectory. Its tightly managed finance, carefully considered product initiatives, and cautious yet opportunistic guidance offer tremendous upside potential. With economic conditions likely improving through shrewd government policy by 2026, PayPal is well-positioned to recover strongly, aided by better consumer confidence and increased spending. I consider PayPal a good buy for investors seeking to achieve market-beating gains over the coming 12 months and beyond. 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