PayPal: Can the finance stock rise by 106%?

Last Updated: 7. März 2024By

Which company comes to mind first when you think of an online payment system? For most people, it is probably PayPal. Now, the company has released its new quarterly figures. How did it perform and is now a good time to invest?

PayPal profit increases by 55% In the fourth quarter, the company reported a revenue of $8.02 billion, compared to $7.38 billion the previous year. The profit amounted to $1.402 billion, compared to $921 million a year ago – a strong increase of 55%.

„We want profitable growth“ „We are driving significant change in our company and are determined to make the necessary changes in our business to achieve profitable growth in the coming years,“ said CEO Alex Chriss.

Disappointing forecasts For the first quarter, the company expects a revenue increase of around 6.5% or 7%. Earnings per share are expected to increase in the mid-single digits, compared to $0.70 in the same period last year. For the full year, the company expects earnings per share of around $3.60, compared to $3.84 in the previous year. These are somewhat disappointing outlooks. However, the majority of analysts do not seem to mind.

Potential for up to $120 Conclusion: As you can see from the chart, the financial stock has not brought much joy to investors – a downtrend dominates. However, analysts are noticeably positive. 23 out of 50 analysts recommend buying, 25 recommend holding, and only two analysts prefer to sell. The average analyst price target is just under $70. This already offers investors a potential of around 20%. However, the highest analyst price target is $120, which means a potential gain of more than 106% for you. A look at the valuation shows: With a P/E ratio of 11 based on earnings estimates for 2024, PayPal is very lowly valued as a tech stock.