PayPal's New Leadership and Strategy Poised to Drive Profitable Growth, Analyst Says

RBC Capital analyst Daniel Perlin reiterated PayPal Holdings Inc PYPL with an Outperform and a $84 price target.

PayPal has called out fiscal 2024 as a transition year to set the company up for long-term profitable growth, Perlin noted.

The combination of fresh leadership, better aligned to drive transaction margin improvement specifically, and management commentary during the quarter gave the analyst incremental conviction of the profitable growth transition.

Perlin’s increased conviction in PayPal’s ability to improve PSP transaction margin is rooted in management commentary on more “partnership-based conversions,” a calculated rollout of Fastlane in fiscal 2024, and anecdotal comments of high demand from their customer conference and the use of low/no-code tools for faster integrations, which improved from 2 weeks to 2 hours.

Perlin’s conviction in better monetizing the Venmo and PayPal digital wallet users is rooted in incremental management commentary on improved card adoption through prompts during the onboarding process, the rollout of personalized rewards to drive commerce originating from the app, and the accelerated integrations.

Perlin’s increased conviction behind Branded Checkout’s growth comes from management commentary on increased product velocity stemming from investments in the Branded Checkout engineering team, and improved integration times encourage merchants to make the change.

Perlin projected second-quarter revenue and adjusted EPS of $7.78 billion and $0.99.

Will PayPal Stock Go Up?

When trying to assess whether or not PayPal Holdings will trade higher from current levels, it's a good idea to take a look at analyst forecasts.

Wall Street analysts have an average 12-month price target of $74.21 on PayPal Holdings. The Street high target is currently at $90.0 and the Street low target is $65.0. Of all the analysts covering PayPal Holdings, 9 have positive ratings, 10 have neutral ratings and no one has negative ratings.

In the last month, 7 analysts have adjusted price targets. Here's a look at recent price target changes [Analyst Ratings]. Benzinga also tracks Wall Street's most accurate analysts. Check out how analysts covering PayPal Holdings have performed in recent history.

Stocks don't move in a straight line. The average stock market return is approximately 10% per year. PayPal Holdings is 13.07% down year-to-date. The average analyst price target suggests the stock could have further upside ahead.

For a broad overview of everything you need to know about PayPal Holdings, visit here. If you want to go above and beyond, there's no better tool to help you do just that than Benzinga Pro. Start your free trial today.

Price Action: PYPL shares traded lower by 0.34% at $58.17 at the last check Friday.

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Photo courtesy of PayPal.