PayPal Holdings Share Price Forecast October 2021 – Time to Buy PYPL?

Shares of American multinational financial technology company PayPal Holdings (NASDAQ: PYPL) are in the green today after closing at $271.70 as of October 19^th  (20:57 EDT). The company is at the forefront of the online shopping revolution that has propelled digital payments over the past several years. The booming $300 billion fintech provides positive prospects to anyone who is an investor right now.

PayPal Holdings – Technical Analysis

According to the financial statement released by PayPal Holdings, the current market cap of the company is at $319.256 billion with total assets worth $73.816 billion. Revenue for 2020 came in at $21.43 billion with a profit margin of 19.60% compared to $17.53 billion in 2019.

Moving averages such as Exponential Moving Average (10)(265.40), Simple Moving Average (10)(263.18), Exponential Moving Average (20)(266.47), Simple Moving Average (20)(264.80), and Exponential Moving Average (30)(268.67) are indicating a buy action. On the other hand, oscillators such as Relative Strength Index (14)(53.98), Stochastic %K (14, 3, 3)(92.20), Commodity Channel Index (20)(74.96), Average Directional Index (14)(25.19) and Awesome Oscillator(−6.70) are neutral.

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Recent Developments

PayPal earns its revenues by collecting a transaction fee on the payments that move on its network. Some of the positive metrics include total payment volume (TPV) of $1.1 trillion which generated revenue of $23.8 billion in the trailing-12-month period. This indicates that the take rate (revenue divided by payment volume) was 2.1% in that period. PayPal’s management now aims to grow the number and dollar amount of transactions that the business processes which will positively impact Net income and free cash flow (FCF) generation. Ever since returning to public markets in July 2015, the company has crushed the S&P 500 index. It produced some stellar metrics such as an 18.1% operating margin and a 17.6% FCF margin.

PayPal offers Venmo for individuals which is a popular peer-to-peer platform that also lets users buy cryptocurrencies. It also upgraded its flagship mobile app, equipping it with new features such as early direct deposit, shopping deals, buy now, pay later (BNPL), bill pay, and a high-yield savings account. Some of the other services of PayPal include Braintree which lets merchants accept digital and mobile payments as well as iZettle which offers a card acceptance and software solution to record, manage, and analyze sales. It also provides working capital loans to business customers to aid in their day-to-day operations.

Should You Buy PYPL Shares?

Investors interested in PYPL should first look at its competitive advantage as it has 371 million active consumer accounts and 32 million active merchant accounts. As a result, e-commerce sites have been gravitating to PayPal as it has the largest potential customer base. Individual shoppers also prefer it as it’s widely accepted wherever they go. As more users enter its network, its overall value increases. It is also in possession of powerful intangible assets, or characteristics that cannot be matched by even its biggest peers.

PayPal is a reliable payment processor that has been operating in over 200 markets (and 25 currencies) globally. It has pioneered the digital payment landscape when it was founded over 20 years ago and has grown steadily into being the biggest digital payments provider. The positive metrics also allowed its management to raise full-year 2021 guidance across the board. It expects a higher growth for TPV (33% to 35%), revenue (20%), and earnings (21%) compared to last year. Additionally, Wall Street has also indicated a buy for the stock, indicating a 35% upside over the next 12 months at recent prices. Considering all of the above, buying PYPL shares is a good move for any investor now.

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