In a research report issued yesterday, Oppenheimer analyst Glenn Greene initiated coverage on shares of Paypal Holdings Inc (NASDAQ:PYPL), with an Outperform rating and an $43 price target, which represents a potential upside of 125.5% from where the stock is currently trading.
Greene wrote, “PayPal has an attractive business model characterized by transaction-related fees, relatively low capital requirements, and strong free cash flow generation. The company’s two-sided digital payments platform is a valuable and difficult-to-replicate asset exhibiting strong network effects. PYPL is particularly well positioned to benefit as retail activity/payments continue to migrate from brick-and-mortar stores toward online and mobile venues. That said, we do have some concerns about PYPL’s long-term competitive positioning within the payment processing ecosystem and reliance on the ACH/card networks. We anticipate mid-teens revenue growth and mid/high-teens EPS growth for the next several years.”
“We introduce FY16/17 EPS estimates of $1.49 (vs. Street’s $1.50 and company guidance of $1.45-1.50) and $1.78 (vs. $1.76 Street), respectively. Our estimates assume ~16% revenue growth and 20.3% operating margins in both years,” the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Glenn Greene has a yearly average return of 20.8% and a 80% success rate. Greene is ranked #2 out of 3976 analysts.