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BTIG Expects Paypal Holdings Inc (PYPL) to Keep Firing Up Rapid Growth

Mark Palmer sees massive monetization potential for PYPL's "crown jewel," Venmo.


Paypal Holdings Inc (NASDAQ:PYPL) is raring to release third quarter results this evening once the bell tolls, and BTIG analyst Mark Palmer continues in his bullish parade along with a “flurry of analyst price target hikes” this year for the online payment giant’s momentum.

With high anticipation for “continued rapid growth,” the analyst reiterates a Buy rating on PYPL stock with a price target of $70, which represents a 4% increase from where the stock is currently trading. (To watch Palmer’s track record, click here)

For the third quarter, the analyst projects adjusted EPS of $0.44, which mirrors consensus expectations. Worthy of note, “PYPL has exceeded consensus expectations every quarter since it spun off from eBay” just two years ago, writes Palmer.

Taking under account an exciting triple threat between a 71% boost in share price throughout the course of 2017, a barrage of analysts getting increasingly confident on this tech player, as well as “a number of catalysts to drive additional upside,” Palmer finds the backdrop looks bullish for Paypal to deliver strong- save for “at least one big lingering competitive threats.”

Palmer boils down his predominant thoughts approaching the quarterly showcase: “What is the status of PYPL’s effort to monetize Venmo, the company’s social peer-to-peer app, which CFO John Rainey referred to as its ‘crown jewel’? We believe the continued upward surge of the company’s shares is due in large part to investors’ anticipation that the pilot of ‘Pay with Venmo’ will be successfully rolled out to the rest of its merchants by YE17 as management has said it would. Venmo’s money-transfer volume more than doubled year-over-year to $8bn in 2Q17, but that service is mostly free to consumers. By encouraging Venmo users to apply their account balances to purchases at participating merchants – and by encouraging more merchants to participate – PYPL will position itself to collect fees on those transactions.”

Without any big-league merchants exhibited yet as part of Paypal’s program, Palmer contends any reveals along with the print will certainly be “meaningful” and could impact the market’s reaction to the company’s financial results.

Wall Street tends to agree with the analyst’s confidence on the payment giant, considering TipRanks analytics reveal PYPL as a Strong Buy. Out of 32 analysts polled by TipRanks in the last 3 months, 25 are bullish on Paypal stock while 7 remain sidelined. With a return potential of nearly 2%, the stock’s consensus target price stands at $68.47.PYPL analyst ratings chart

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