Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Canaccord Sees One Clear Positive Catalyst for PayPal

Stock Markets Sep 26, 2022 12:32
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
PYPL
-0.88%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
AMZN
-1.39%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Sam Boughedda

In a wide-ranging note Monday, a Canaccord analyst stated that despite a tough macro backdrop, they see one clear upcoming positive catalyst on the horizon for PayPal (NASDAQ:PYPL).

That positive catalyst is Pay with Venmo being launched on Amazon (NASDAQ:AMZN), which is expected to occur in the fourth quarter.

"With nearly 40% eCommerce market share in the US, Amazon remains the clear untapped greenfield for PayPal domestically. And beyond the TPV and P&L contributions from Amazon, we cannot but help to contemplate what this could mean for the value of the Venmo platform medium term. With approximately 55 million monthly active users in the US on Venmo, we believe this launch could compel other e-commerce platforms to compete with Amazon for these customers, driving a potentially accelerating cadence of Venmo acceptance by merchants over time," explained the analyst.

The analyst maintained a Buy rating and a $160 price target on PayPal.

"Venmo on Amazon could add a couple of points of growth to revenue and adj. EPS," he added.

"In our sensitivity analysis, we are assuming a take rate range of 1.4% to 2.2% and penetration of 2-10%. Clearly, market-share penetration here will take time but this type of analysis can provide an understanding of what the deal could mean on an annualized basis. At the midpoint of this sensitivity analysis, we arrive at a boost to annualized full run rate revenue and non-GAAP EPS growth of ~1.5% and ~3% points, respectively. Of course, the key here will be adoption, and we expect PayPal will support this launch with a marketing effort."

PayPal shares are down 1.3% Monday.

Canaccord Sees One Clear Positive Catalyst for PayPal
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email