PayPal Holdings, Inc. (PYPL) saw continued growth as it transitioned from 2020 to 2021, significantly outperforming the S&P 500 as of March 2021 and rising by approximately 120.4% compared to the S&P’s gain of about 21.2%. Institutions were actively buying the stock in the fourth quarter. This global company climbed the WhaleWisdom Heat Map to a ranking of 17 from 34.
PayPal operates a digital payment system that makes commerce more convenient and secure for small businesses and consumers. PayPal also owns Venmo, a popular U.S.-based application that allows users to send and receive funds from friends and contacts without fees. The appeal of secure, convenient online money transfer apps and flexible payment options have skyrocketed throughout the pandemic.
Hedge Funds Sell Despite Growth
PayPal received mixed responses from Hedge Funds and Institutions. While Hedge Funds were selling, some Institutions added the stock to their portfolios. The aggregate 13F shares held increased to approximately 968.7 million from 968.3 million, growing about 0.04%. In contrast, Hedge Funds decreased their holdings by about 5.3% to 214.5 million. Overall, 46 hedge funds created new positions, 174 added to existing holdings, 47 exited, and 196 reduced their stakes.
Encouraging Multi-year Estimates
Analysts expect to see earnings rise over the next four years, with increases in growth from 2021 to 2024 spanning from approximately 17.5% to 26.0%. These year-over-year estimated increases could bring earnings to $8.88 per share in 2024, up from $4.56 for 2021. Revenue predictions are also noteworthy, with revenue expected to increase to $44.6 billion by 2024, up from $25.7 billion.
Analysts Are Feeling Positive
Analysts have good things to say about the stock as price targets were raised amid PayPal’s strong performance and potential. BTIG analyst Mark Palmer maintained a Buy rating on PayPal’s shares and increased its price target to $345 from $300. Fahed Kunwar from Redburn Ltd. Also gave PayPal a Buy rating, citing its powerful brand and the expanded customer revenue stream from its acquisition of Venmo. Susquehanna International Group analyst James Friedman gave the stock a positive rating and price target of $330, noting that the company has a new cryptocurrency payment strategy with a good chance of success.
PayPal continues to weather the pandemic and maintain positive momentum. The company has been a notable player in the payment service business. Its flexible, secure payment options remain in high demand. Investors have good reason to acquire shares given motivating estimates from analysts and the potential for continued growth.