Paypal Holdings Share Forecast November 2021 – Time to Buy PYPL?
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Shares of American multinational financial technology company Paypal Holdings(NASDAQ:PYPL) are in the red today, closing at $205.42 as of November 9th (22:57 EST). After months of speculation that the company would acquire Pinterest, it recently confirmed otherwise. The shares decreased by 10.5% on Tuesday after the profit and sales outlooks of the company fell below expectations.
Paypal – Technical Analysis
According to the financial statement released by PayPal, the market cap of the company is $241.375 billion with total assets worth $73.816 billion. Revenue for 2020 was at $21.43 billion with a profit margin of 19.60% compared to $17.53 billion in 2019.
Oscillators for Paypal Holdings such as Stochastic RSI Fast (3, 3, 14, 14)(11.96), Williams Percent Range (14)(−91.87), Bull Bear Power(−50.45) and Ultimate Oscillator (7, 14, 28)(32.61) are neutral. Moving averages such as Exponential Moving Average (10)(228.39), Simple Moving Average (10)(228.43), Exponential Moving Average (20)(238.24), Simple Moving Average (20)(242.47) and Exponential Moving Average (30)(245.19) are indicating a sell action.
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Recent Developments
PayPal played a pioneering role in the fintech industry of the 90s. A long period as a subsidiary of eBay prevented it from becoming a major player in the industry. However, the shares have risen by 600% since its 2016 spinoff. PayPal recorded payment volume of $1.2 trillion on an annualized basis. The most successful growth area of the business is in Venmo, which accounted for $58 billion of $311 billion in payment volumes in the 2nd quarter. Boosted by the popularity of digital payments during the pandemic, Paypal’s payment volume grew by 40% year over year in the last quarter. It has shown consistent profitability unlike many of its peers and have made the majority of its acquisitions in cash.
Most of Paypal’s revenue has been generated from transactions from more than 400 million active accounts. Some of its varied product offerings such as Hyperwallet, Braintree, Xoom, and Zettle also chip in. Paypal’s peer-to-peer payment platform called Venmo allows users to send and receive cash via a smatphone. It has been one of the most successful parts of Paypal’s business model with payment volume increasing 58% year over year.
Paypal’s revenue growth remains robust, raking in $12.3 billion in the first 6 months of 2021, while net income surged 41% to $2.3 billion. The company has also limited operating expense growth to only 18%. Management expects revenue growth to decrease to 20% for 2021. This is a smart move considering that the rapid stock price growth of past years has given way to stagnation. The shares have decreased by 20% from their July high and have risen only 6% since the beginning of 2021.
Should You Buy PYPL Shares?
For investors, owning shares of a payments company like PayPal is advantageous as it not only facilitates transactions on its network, it also might be a better and more sustainable approach. Consumers are 60% more likely to purchase directly from a merchant when PayPal is an option at checkout. As inflation is one of the biggest concerns of the market right now, investors should consider buying shares in PayPal as it is one of the best ways to position your portfolio for attaining higher prices. PayPal’s competitive position in the market is what makes the company different as the word “inflation” wasn’t even mentioned once on the company’s most recent earnings call. This is a big sign that Paypal’s management doesn’t consider it an important factor.
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