In a research report published Thursday, Piper Jaffray analyst Gene Munster reiterated an Underweight rating on shares of Paypal Holdings Inc (NASDAQ:PYPL) with a price target of $30, which reflects a potential downside of -11% from last closing price.
Munster wrote, “We believe Xoom is too small relative to PayPal and the timeline for synergy potential too long to impact our current PayPal thesis. However, we do see L-T synergy potential to the extent PayPal users value a money transfer offering, which could enable Xoom to significantly accelerate its user/transaction growth. Our bear/base/bull scenarios value Xoom at $760M/$1.5B/$3.2B in 2020E (vs. PYPL’s current market cap of $42B) assuming Xoom penetration of PayPal’s user base at 0%/1%/3% (see pg. 4). We remain UW as we continue to be uncertain regarding PayPal’s value proposition to consumers/merchants in an omni-channel payments world and competition impacting its L-T take-rate trends.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gene Munster has a total average return of 21.0% and a 61.0% success rate. Munster has a 15.2% average return when recommending PYPL, and is ranked #6 out of 3766 analysts.