PayPal’s 40 Percent Upside

Despite the recent plunge in its offering price, PayPal could see a 40 percent jump to $46 per share if the company’s recent investments pay off.

Since its split from eBay, the company’s shares saw a more than 10 percent growth and then fell by 20 percent to sell at $34.60. But in spite of the losses, CEO Dan Schulman is bullish on growth, based off of its four recent investments in payments companies, including Xoom, Venmo, Braintree and Paydiant, according to a report from Barron’s on Saturday (Aug. 29).

As it moves away from eBay, not only can the company now partner with major vendors like Staples, but it can also be more bold with its investments, given the $6.6 billion of cushioning cash it received from eBay as a parting gift.

“To most people, PayPal is still a button on a website that makes it easier and more secure to transact online,” CEO Dan Schulman told Barron’s. “We need to offer a more fulsome partnership that takes better advantage of our global scale in the changing landscape.”

With its recent acquisitions, the company tied with a range of revenue streams, ranging from remittances and social commerce to payments gateways and retail payments, to its business model.

For instance, its recent acquisition, Xoom, which is highly popular for remittances with the Indian population in the U.S., is standing up to give tough competition to Western Union, which for years has dominated the business line.

Its other recent investment in buying off Paydiant has tied it up with merchants, which use its solution to process payments using its app. The solution is currently being used by food chains like Subway, Burger King and the like.

Another source of the company’s income, which is increasingly gaining traction among millennials, is Venmo — a social commerce platform, which allows users to easily send and receive money.

After buying off Braintree, the company is literally dipping into any transaction processed through its gateway by competitors like Apple, Uber and Airbnb.

With revenue from some of its recent acquisitions and the eBay payment fortifying its growth, the company is expected to clock in an earning of $1.8 billion, or $1.49 a share, in 2016 on revenue of $10.8 billion, Barron’s reported.

With a more aggressive credit lending plan and “just some things to go right,” Bill Carcache, a Nomura analyst, says, PayPal will unlock a new phase of growth.

[vc_row full_width=”” parallax=”” parallax_image=””][vc_column width=”1/1″][/vc_column][/vc_row][vc_row full_width=”” parallax=”” parallax_image=””][vc_column width=”1/1″][vc_separator color=”grey” align=”align_center” style=”” border_width=”” el_width=””][vc_single_image image=”148412″ alignment=”center” style=”vc_box_shadow_3d” border_color=”grey” img_link_large=”” img_link_target=”_blank” css_animation=”left-to-right” img_size=”full” link=”http://www.pymnts.com/whats-hot-today/”][vc_column_text css_animation=””]

To check out what else is HOT in the world of payments, click here.

[/vc_column_text][vc_separator color=”grey” align=”align_center” style=”” border_width=”” el_width=””][/vc_column][/vc_row]