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PayPal Holdings Inc PYPL

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Morningstar’s Analysis

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PayPal Maintains its Momentum in Fourth Quarter

Brett Horn, CFA Senior Equity Analyst

Analyst Note

| Brett Horn, CFA |

In the fourth quarter, PayPal largely held the pace of growth it has seen since the start of the pandemic. Going forward, the company will have one more quarter of relatively favorably comps, and year-over-year growth will be more difficult to achieve as the year goes on. PayPal still sits at the center of the highest growth areas in the payments space, and remains well positioned in the near term. However, we retain our concerns that the competitive environment for the company could grow more difficult over time, and believe the market is overly focused on near-term tailwinds. We will maintain our $124 fair value estimate.

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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 Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 26,500