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Valued at a market cap of $89.6 billion, PayPal Holdings, Inc. (PYPL) is a leading global provider of digital payment solutions, facilitating seamless and secure transactions for both consumers and merchants. The San Jose, California-based company operates a two-sided network at scale, connecting merchants and consumers to enable online, in-person, and peer-to-peer payments through platforms like PayPal, Venmo, and Xoom.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and PayPal Holdings fits this criterion perfectly. With operations spanning over 200 markets, PayPal supports payments in more than 100 currencies, offering unparalleled flexibility in sending, receiving, and managing funds. Strategic acquisitions, including Braintree, iZettle, and Hyperwallet, further enhance its ability to deliver innovative and comprehensive payment experiences.
However, the technology platform and digital payments company is trading 4.6% below its 52-week high of $93.66, hit on Dec. 9. Despite this, shares of PayPal have risen 27.1% over the past three months, overshadowing the broader Dow Jones Industrials Average's ($DOWI) 6.9% rise over the same time frame.
Longer term, PYPL has surged 45.6% on a YTD basis, outperforming DOWI's 16.5% gain. Moreover, shares of PayPal have jumped 51.8% over the past 52 weeks, compared to DOWI’s 20.1% return over the same time frame.
PYPL has shown a bullish price trend, consistently trading above its 50-day and 200-day moving average since August.
Shares of PayPal fell nearly 4% on Oct. 29 after the company missed Q3 revenue estimates, reporting $7.9 billion. Despite reporting better-than-expected adjusted EPS of $1.20, its guidance for Q4 was weak, forecasting low-single-digit revenue growth and a decline in adjusted EPS by a low- to mid-single-digit percentage. PayPal's focus on its "price-to-value" strategy, prioritizing profitable growth over aggressive expansion, raised concerns about future revenue growth. Although the company reported increases in payment volume, transactions, and active accounts, the soft outlook overshadowed these positive metrics, leading to investor concerns.
Nevertheless, PayPal has shown significant double-digit returns in both YTD basis and over the past 52 weeks, contrasting with its rival Mastercard Incorporated (MA), which has risen 25.4% and 25.9% in the respective periods.
Despite PYPL's impressive gains, analysts are cautiously optimistic about its prospects. Among the 42 analysts covering the stock, there is a consensus rating of “Moderate Buy,” and as of writing, the stock is trading below the mean price target of $90.38.
