Paypal Holdings Inc’s Long-Term Buy Thesis Remains Intact: Cantor
Cantor analyst Youssef Squali weighed in today with his forecast on Paypal Holdings Inc (NASDAQ:PYPL), as the spinoff from eBay is now complete. The analyst updated his estimates for PayPal to reflect the financials for the standalone business post spinoff. According to Squali, expectation for midteens growth over the next 3-5 years, strong brand, large addressable opportunity on/offline, and leading position online are key reasons why he finds PYPL compelling at current levels.
Squali wrote, “We continue to view PayPal as one of the best plays on the digital payments opportunity. With our estimates for over $280B in TPV and ~$9B in revenue for 2015, up mid- and high-teens, respectively, PayPal already commands a significant (~10%) share of the ecommerce payment market. Now, with mobile blurring the lines between online and offline commerce, PayPal is leveraging its base of 170M+ monthly customer active accounts and global reach to address the broader opportunity in global commerce payments, estimated at ~$25T.”
“We’re revising our estimates for 2015 revenue/EBITDA/EPS to $9.24B/$2.52B/$1.23 from $9.17B/$2.50B/$1.10. For 2016, we now expect $10.78B/$2.98B/$1.38 respectively vs. $10.92B/$3.09B/$1.29, previously,” the analyst added.
Squali reiterated a Buy rating on Paypal shares, with a price target of $45, which represents a potential upside of 31.5% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Youssef Squali has a total average return of 14.7% and a 55.7% success rate. Squali has a -6.5% average return when recommending PYPL, and is ranked #54 out of 3752 analysts.
Out of the 26 analysts polled by TipRanks, 18 rate Paypal Holdings Inc stock a Buy, 5 rate the stock a Hold and 3 recommend to Sell. With a return potential of 24%, the stock’s consensus target price stands at $42.46.