What Analysts Have To Say About Tesla Motors Inc (TSLA) and Paypal Holdings Inc (PYPL)

As Tesla Motors Inc (NASDAQ:TSLA) prepare for their big event tonight, unveiling the Model 3, Credit Suisse analyst provides his positive expectations on the new model. Meanwhile, rising competition in the mobile-browser payments arena for Paypal Holdings Inc (NASDAQ:PYPL), and industry commentary regarding the acquisition of the company by Google has compelled Piper Jaffray analyst to provide a bearish stance on the stock.

Tesla Motors Inc

The Model 3, Tesla’s long anticipated, more affordable model is expected to unveil tonight at 08:30PM Pacific Reserve. As excitement builds up for a model that is still far from hitting the road, analysts evaluate the impact of tonight’s event on the company’s stock. Credit Suisse analyst Dan Galves reiterated a Buy rating for the stock and set a price target of $240.00, his explanation follows.

The analyst’s evaluation isn’t necessarily centered on the features of the model, but rather, on speculative numbers for how this unveiling will serve as a catalyst for Tesla. The analyst explains, “We don’t expect much incremental information about the car vs what Tesla has already said… a dynamic that has typically resulted in “sell the news” price action.” He continues, “However, the real catalyst from the Model 3 unveil will be the first indication of demand for the car, in terms of initial reservations…and we think this will be a positive surprise.”

This event will aid in reaching an expected reservation demand of 100,000+ in the first weeks. These reservations come from two key population pools as stated by the analyst; the current owners of Model S and X, and those who have test driven the Model S but can’t afford it ($70,000). The analyst explains, “Of the consumers who testdrive Model S, we estimate that only about 15% actually buy the car (typical auto dealer conversion rate is ~50%).” Model 3, however is expected to sell at half the price without sacrificing the best features.

Lastly, Galves mentions other catalysts for the stock including a Model X ramp, positive Model X reviews, and the company likely meeting its Q1 delivery expectations. The analyst says, “We believe the near-term risk / reward remains positive.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Dan Galves has a total average return of 11.5% and a 57.5% success rate. Galves has a 17.5% average return when recommending TSLA, and is ranked #485 out of 3775 analysts.

As of this writing, out of the 16 analysts who have rated the company in the past 3 months, 8 gave analysts Tesla a Buy rating, 3 remain on the sidelines, and 5 gave the stock a Sell rating. The average 12-month price target for the stock is $246.86, marking a 8.80% upside from where shares last closed.

Paypal Inc.

Rumors about Apple stepping into the mobile-browser payments arena with its payment platform, Apple Pay, and industry commentary on a Google acquisition of Paypal have been a raising concern for PiperJaffray analyst, Gene Munster. The analyst’s last report emphasised the threat of Apple Pay to Paypal’s total payments volume in the mobile-browser sector. The analyst adds his thoughts on the alleged acquisition of Google, ultimately reiterating a Sell rating with a $33 price target.

Regarding Paypal’s acquisition, the analyst states, “Recent industry commentary indicating a card network or Google may buy PayPal appear unsubstantiated and wishful; we find it difficult to justify belief that there is a meaningful probability that PayPal is acquired.” He explains, “Given the company’s historical acquisition patterns; between paying $55B-$60B for PayPal and growing an organic business, we believe Google would favor an organic build.” Munster adds, “we believe that these companies would be even more sheepish around such a massive acquisition given the potential for oncoming assaults from new competition.”

Speaking of competition, the analyst refers back to the rumors on Apple stepping into the mobile-browser payments arena. Munster repeats, “We believe ~20% of PayPal’s TPV is conducted on mobile iOS devices, a sizeable portion of PayPal’s business that, for the first time, will face competition.” He comments, “We believe there is potential for preferential treatment for Apple Pay”.

He concludes, “We continue to believe that PYPL remains overvalued relative to long-term headwinds from competition and, despite recent commentary from industry participants and pundits, we believe there is a low probability of acquisition.” He continues, “Our long-standing concerns over competition were validated last week when Re/code reported that Apple is planning on expanding Apple Pay into the mobile browser before the upcoming holiday season.”

According to TipRanks, Gene Munster has a 65% success rate, and delivers an average return of 19.3% per recommendation. Out of the 20 analysts who have rated the company in the past 3 months, Munster gave TSLA a Sell rating, whilst 13 gave TSLA a Buy rating and 6 remain Neutral. Overall, all recommendations amount to a 12-month average of $41.89, marking a 7.30% upside from where shares last closed.


  • .Did someone mention PayPal?

    Notwithstanding the otherwise constant stream of disingenuous and delusional nonsense that flows from eBay/PayPal, the share price history of these two clunky operators demonstrate the reality …

    Aug 2007: (pre John Donahoe) EBAY ~$40; AMZN ~$40;
    Jul 2015 (pre eBay-PayPal split): EBAY ~$66; AMZN ~$480;
    Jul 2015 (post-split): PYPL ~$37; EBAY ~$28; AMZN ~$530;
    Currently: PYPL ~$39; EBAY ~$24; AMZN ~$599—LOL …

    PayPal is standing still, and eBay is effectively going backwards—at a rate of knots …

    And, notwithstanding the “spin-off” of PayPal from eBay, eBay and “PreyPal” remain effectively joined at the hip—for at least the next five years—and anyone that thinks otherwise is simply uninformed; and, thanks to a continuation of most of the destructive policies introduced over the eight year reign (2007–2015) of the “Pain from Bain”, John Joseph Donahoe II, the eBay marketplace is continuing on its slow journey down the toilet; nevertheless, during Johnny Ho’s occupation of the eBay corner office, this cretin and his gang of hand-picked Keystone Kops still managed to obtain for themselves massive, unearned, “performance” bonuses—while the company’s “long” shareholders received not one penny.

    PayPal is a clunky, non-bank-licensed, non-deposit-insured, virtually non-regulated, “pretend” bank; a higher fee-charging payments intermediary that, in the main, rides on the back of the world’s banks’ existing payments systems, with no formal agreement with those banks other than PayPal’s operating of a credit card merchant account facility with, and the making of direct debits/credits on some users’ bank accounts via, one of those real banks.

    PayPal is, in its own words, “a merchant of sorts”, it is not a licensed “bank”; virtually everything that “PreyPal” does is done via “marketing” arrangements with licensed financial institutions—for example, look for the identity of the actual credit provider (in the micro print) on their credit providing instruments …

    Funds received via “PreyPal” are at risk of being subjected to arbitrary holds; funds left “on deposit” with PayPal are not FDIC-insured. Even more perilous (for PayPal’s shareholders), the great majority of PayPal’s business originates from its (still) effectively mandated place on the eBay marketplace, so it logically follows that—with the destructive Johnny Ho-Ho-Ho now sitting at the head of the PayPal boardroom table—”PreyPal” will undoubtedly be accompanying eBay on its journey to the sewage farm.

    The reality is, PayPal’s parasitic, higher fee-charging payments operation has little long-term future—outside of its mandated place on the atrophying eBay marketplace—now that professional online/mobile payments offerings from MasterCard (“MasterPass”) and Visa (“Visa Checkout”) are available to any online merchant that has (or can obtain) a credit card merchant account with a real bank.

    And, with respect particularly to “mobile” payments, notwithstanding Apple Pay’s disappointing initial showing, methinks Apple Pay, Samsung Pay, Android Pay, “MasterPass”, and “Visa Checkout”, that is, those operators that have formal relationships with the world’s retail banks and MasterCard/Visa, will soon enough throttle the flow of oxygen to a great deal of the clunky PayPal’s parasitic operations.

    PayPal users should never give PayPal an authority to direct debit their bank accounts; PayPal should only ever be given access to funds via a real-bank credit card account; that way your credit card-issuing bank will be the final arbiter of any transaction dispute; similarly, sellers should never accept payment via PayPal for goods that are going to be picked up by the buyer; PayPal offers sellers zero protection from scammers in such circumstances.

    PayPal’s one-time adoptive parent, eBay, is likely the most unscrupulous commercial entity operating on this planet; but, have no fear, eBay is an equal-opportunity fraudster; demonstrably, they will knowingly aid and abet the defrauding of buyers by unscrupulous eBay merchants who bid on their own auctions, and, conversely, of honest sellers by unscrupulous buyers—as long as there is a financial benefit in such fraud for eBay.

    And if anyone thinks that the clunky “PreyPal” is any more scrupulous—given their equally poor customer service and lack of any mediation of transaction disputes by human beings, which effectively results in a hard-wired bias towards buyers/payers that they now necessarily have to pander to—good luck to all you small online merchants who may get burned in the process …

    For a detailed analysis of the ugly reality of eBay’s demonstrable, calculated, facilitation of endemic shill bidding fraud on consumers on its auctions marketplace—Google “Shill Bidding on eBay: Case Study #5”

    Goodbye clunky PayPal—it’s not been nice knowing you—Google “Retail Payments: The Reality”