PayPal’s stock is owned by a variety of retail and institutional investors. As that chart shows, PayPal’s rising operating income has driven its share price higher since its split from eBay. Before buying shares of PayPal, you need to determine whether it’s the right stock for you. Here are some factors to consider before buying shares of PayPal.
Here’s a step-by-step guide to buying PayPal stock using the five-star-rated platform Fidelity. PayPal is one of the world’s largest and most ubiquitous digital payment platforms. The company processed a staggering $1.5 trillion in total payment volume in 2023. It has more than 430 million users, and 79% of the largest retailers in North America and Europe offer the option to pay via PayPal. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.
- A PayPal stock-trading launch would come at competitive time for the fintech industry.
- The agency mentioned behavioral prompts used by online brokerages and investment advisors that may encourage investors to trade more stocks and other securities and take on more risks.
- More than 10 million new individual investors have entered the market in the first half of this year, roughly matching last year’s record level, according to estimates from JMP Securities.
- Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
- Meanwhile, with PayPal CashPass, consumers will be able to earn cash back on purchases as well as rewards.
It generates lots of free cash flow it uses to expand and repurchase its attractively priced shares. Meanwhile, PayPal’s cost-cutting efforts should improve its profitability, potentially boosting its stock price. The 2022 speed bump caused shares to plunge, which has the stock trading at a very reasonable valuation. PayPal’s improving profitability, value-enhancing share repurchases, and attractive valuation mean it could be an incredibly enriching stock to buy for the long term. However, it does return cash to investors by repurchasing shares.
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Here’s what you need to know about investing in this immensely profitable small-box discount supermarket. Increasing customer engagement and personalization are two other areas that PayPal is targeting. With its smart receipts offering, PayPal will provide customers a receipt as well as personalized product recommendations from the same merchant. To say PayPal’s (PYPL -0.24%) stock has struggled over the past three years is a bit of an understatement. Heading into 2024, the stock saw negative returns the past three years, and it was down nearly 75% during that period.
The company forecast Q1 revenue growth of 6.5%, but didn’t issue full-year revenue guidance, while it said it expected adjusted EPS to be in line with the $5.10 it reported in 2023. The event didn’t exactly leave investors in awe, however, as it focused on PayPal’s artificial intelligence (AI) ambitions. In 2024, improving products through AI isn’t exactly cutting edge. Meanwhile, the stock sold off a couple weeks later after the company reported its Q4 results.
Dan Shulman was tapped as CEO-designee in 2014 and worked with the company extensively during the build-up to the IPO. Since then, Mr. Shulman has worked diligently as CEO to democratize and transform digital payments for the benefit of individuals, families, and businesses worldwide. However, that doesn’t mean PayPal can’t be a good stock to own for the long term.
Balances can also be carried on a short or long-term basis but the company does not pay interest. Paypal provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company began working with cryptocurrency late in 2020 and now supports four currencies. Paypal users can access the cryptocurrency wallet through their accounts and buy, sell, and trade the top four currencies including Bitcoin and Ethereum. Trading has become a booming business for the companies that offer it. PayPal rival Square offers stock and cryptocurrency trading through the Square Cash App, and its CFO has said the app drives engagement and revenue per user.
However, eBay (EBAY -0.1%) acquired the company a few months later for $1.5 billion in stock. PayPal investors received 0.39 shares of eBay for each PayPal share they held. More recently, PayPal came under pressure due to its 2024 guidance.
PayPal Didn’t Shock the World. What’s Next for Investors?
A hold rating indicates that analysts believe investors should maintain any existing positions they have in PYPL, but not buy additional shares or sell existing shares. Now, PayPal provides digital financial infrastructure, services, and support across a wide range of applications globally including but not limited to payments, wallet services, and credit. The company is headquartered in San Jose, California, and is built on the belief that everyone has the right to participate in the global digital economy. The company operates a portfolio of web-based applications that provide a host of other services as well.
The ETFMG Prime Mobile Payments ETF (IPAY -0.16%) had the largest allocation to PayPal stock in late 2023 at 5.5%. According to ETF.com, 288 ETFs held 109.6 million shares of PayPal as of late 2023. The biggest holder was the Invesco QQQ Trust (QQQ -1.19%), with 19.2 million shares. However, PayPal had a relatively small portfolio weighting at 0.5% of the ETF’s holdings. While that may seem bad, there is a good possibility that Chriss quickly learned his lesson and when the company issued its 2024 guidance, the plan was to underpromise and overdeliver. Given all the new promising offerings that PayPal is set to introduce, guidance appears to be conservative.
After leaving Ally Invest, Hagen is now the CEO of a previously unreported division of PayPal called Invest at PayPal, according to his LinkedIn page. Hagen was the co-founder of online brokerage TradeKing, which was bought by Ally Invest. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. © 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed.
Top website in the world when it comes to all things investing. Upgrade to MarketBeat All Access to add more stocks to your watchlist. Sign-up to receive the latest news and ratings for PayPal and its competitors with MarketBeat’s FREE daily newsletter. Shares of PayPal jumped more than 3% following the CNBC report, while Robinhood shares lost more than 3%. Still, one source familiar with the idea said it was unlikely that the trading service would roll out this year. The sources spoke on condition of anonymity because PayPal’s plan was not public, and they were not authorized to share information about possible partnerships.
About PayPal Holdings, Inc.
None of these innovations by themselves are exactly groundbreaking. However, they are solid offerings that should help drive engagement and transactions growth. However, the company’s numbers don’t necessarily reflect this narrative.
PayPal valuation
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Robinhood, which became a publicly traded company this summer, has seen explosive growth with more than 22.5 million customers and doubled revenue in the most recent quarter from a year ago. The financial technology (fintech) company operates its namesake payments platform and several branded and non-branded platforms. Notable brands include its peer-to-peer payments https://www.fx770.net/ app Venmo and shopping experience platform Honey. PayPal also offers a buy now, pay later solution to finance transactions. PayPal (PYPL -0.24%) is a leader in digital payments, which is why many investors seek to invest in PayPal stock. The company’s technology enables people to make digital payments to other PayPal users and merchants that accept PayPal.