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PayPal Presents a Buying Opportunity, Guggenheim Says

PayPal stock

PayPal (NYSE: PYPL) stock remains the best performers over the last twelve months. Its share price is currently hovering close to the highest level of $121. Although the share price rallied more than 29 per cent in the past year, the market analysts are anticipating further upside in the coming days. They believe the muted investor’s reaction to financial results is offering a buying opportunity for new investors.

PayPal reported several new financial records in the final quarter and fiscal 2019. Its revenue and earnings grew at a double-digit rate. The company anticipates similar growth for fiscal 2020 despite increasing market competition.

PYPL PayPal Holdings, Inc. daily Stock Chart

Guggenheim is Seeing a Buying Opportunity in PayPal Stock

Guggenheim looks optimistic over the future fundamentals of PayPal. The firm is showing confidence in its expansion in China. The latest Honey acquisition is adding to the firm’s confidence. Its analyst Jeff Cantwell provided a Buy rating, saying the muted stock reaction to the fourth-quarter beat creates an opportunity for investors.

The company had topped fourth-quarter revenue and earnings estimates by $20ml and $0.03 per share. “Transformative purchase of Honey is a significant positive and expects long-term tailwind with expansion into China. PayPal’s risk profile now looks favorable, valuation looks reasonable, and we expect further price appreciation from here,” Jeff Cantwell.

Fourth Quarter Results and 2020 Outlook Impressed Analysts

The company generated fourth-quarter revenue of $4.96bn, up 17 per cent from the year-ago period. The full-year revenue grew 15 per cent to $17.77bn. Its fourth-quarter operating income enlarged 34 per cent year over year while full-year operating earnings grew 24 per cent from the past year period.

PayPal delivered strong results in 2019, achieving many records including revenue, net income, and operating margin performance.  We added 37.3 million net new active accounts, bringing total active accounts to 305 million, up 14% year over year,” said Dan Schulman, President of PayPal.

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.

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