PayPal (NASDAQ:PYPL) Shares Rise 3.1% - What Comes Next?

PayPal Holdings, Inc. (NASDAQ:PYPL) saw its shares increase by 3.1% on Tuesday, reaching a maximum price of $86.95 before closing at $86.62. During midday trading, around 2,537,429 shares changed hands, reflecting a significant drop of 63% compared to the average daily volume of 6,823,171 shares. The stock had previously closed at $83.99.

Analyst Ratings and Market Sentiment

Recent evaluations by analysts have created a positive outlook for PayPal’s stock. Wells Fargo & Company raised its price target for PayPal from $70.00 to $75.00, maintaining an "equal weight" rating as stated in their research on October 17th. Needham & Company LLC reiterated a "hold" rating on PayPal shares on October 30th. Furthermore, Canaccord Genuity Group bumped their price target from $80.00 to $96.00, labeling it a "buy" in their report on October 30th. Macquarie increased their target on PayPal from $95.00 to $115.00, assigning it an "outperform" rating on December 17th, while Royal Bank of Canada reiterated an "outperform" rating with a target price of $100.00 on December 12th. Out of the analysts surveyed, fourteen rated the stock as a hold, twenty-one as a buy, and one as a strong buy. Current consensus indicates a "Moderate Buy" rating and an average target price of $88.65 according to MarketBeat data.

Performance Metrics for PayPal

The company's 50-day moving average stands at $86.75, while its 200-day moving average is at $76.10. Financially, PayPal showcases a quick ratio of 1.25, a current ratio of 1.25, and a debt-to-equity ratio of 0.49, with a market capitalization of $87.02 billion. The price-to-earnings (PE) ratio is at 20.72, while the price-to-earnings growth (PEG) ratio is found to be 1.66, and its beta is 1.44.

On October 29th, PayPal published its quarterly earnings results. The company reported earnings per share (EPS) of $1.20, surpassing analyst expectations of $1.07 by $0.13. PayPal experienced a net margin of 14.08% and a return on equity of 23.44%, bringing in revenues of $7.85 billion, slightly below the anticipated $7.88 billion. Compared to the previous year's quarter, the company’s revenue showed an increase of 6.0% from the $0.97 EPS recorded the year before. Analysts predict PayPal Holdings, Inc. will report an EPS of 4.57 for the current year.

Institutional Investment Trends

Recent changes in hedge fund stakes indicate a growing interest in PayPal. Mizuho Securities USA LLC recently increased their holdings by an impressive 12,919.4% during the third quarter, accumulating 10,500,000 shares valued at $819,315,000 after buying an additional 10,419,351 shares. Similarly, FMR LLC raised its stake by 86.3%, now owning 16,762,080 shares valued at $1,307,945,000 after acquiring 7,767,072 shares. Additionally, World Investment Advisors LLC entered a new position in PayPal worth $387,435,000 in the third quarter. Primecap Management Co. CA also increased its stake by 180.7%, owning 4,946,460 shares valued at $287,043,000, and Clearbridge Investments LLC raised their position by 28.1%, owning 8,511,242 shares worth $493,907,000. Currently, 68.32% of PayPal stock is held by hedge funds and other institutional investors.

Overview of PayPal

PayPal Holdings, Inc. operates a digital payment platform that facilitates transactions for consumers and merchants globally. The company maintains a large-scale two-sided network that connects merchants and consumers, enabling payments online and in-person. Users can send and receive funds through various sources, including bank accounts, PayPal or Venmo account balances, and credit products, as well as through cryptocurrencies and stored value products like gift cards.

Is PayPal a Good Investment Right Now?

Before making any investment decision regarding PayPal, it's critical to analyze various factors. Although PayPal has garnered a "Moderate Buy" rating from analysts, it is worth noting that there are stocks that leading analysts consider more favorable at this time. Investors may want to explore other options before finalizing their investment choices.

PayPal, Investment, Market