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PayPal Holdings Inc PYPL

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Morningstar’s Analysis

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PayPal’s Growth Slows in Third Quarter

Brett Horn, CFA Senior Equity Analyst

Analyst Note

| Brett Horn, CFA |

PayPal's growth in the third quarter remained fairly strong on an absolute basis, though it was slower compared with recent results. This is largely due to the expected wind-down of its eBay relationship and the fact that PayPal is running up against difficult comparisons. We think the quarter showed that PayPal’s trajectory going forward might not be completely smooth and that the current market price reflects more of a best-case scenario from a long-term perspective. We will maintain our $147 per share fair value estimate for the narrow-moat firm.

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Company Profile

Business Description

PayPal was spun off from eBay in 2015 and provides electronic payment solutions to merchants and consumers, with a focus on online transactions. The company had 377 million active accounts at the end of 2020, including 29 million merchant accounts. The company also owns Xoom, an international money transfer business, and Venmo, a person-to-person payment platform.

2211 North First Street
San Jose, CA, 95131
T +1 408 967-1000
Sector Financial Services
Industry Credit Services
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 26,500