Why PayPal Could Soar To $350 Per Share

Aug. 10, 2020 3:54 PM ETPayPal Holdings, Inc. (PYPL)MA, SQ, V66 Comments
Güner Soysal profile picture
Güner Soysal


  • With its focus on e-commerce, online consumption and mobile payments, PayPal is one of the leading payment providers of the 21st century.
  • The global pandemic has exceeded e-commerce growth forecasts by 3-5 years, which also triggered a growth boost for PayPal, according to management.
  • PayPal has numerous growth factors which, together with a diversification and scaling of the business model, should ensure continued growth in the coming years.
  • While the company has a substantially lower valuation than its peers, my DCF calculation indicates an upside potential of around 75%, which corresponds to a per share price of around $350.

1. Introduction

PayPal (NASDAQ:PYPL) is benefiting from at least three secular trends: a) increased adoption of e-commerce, b) globally growing online consumption and c) the increasing use of digital, cashless & mobile payment solutions.

With its clear focus on the online business and mobile payments, PayPal is one of the payment services providers of the 21st century and is seen as one of the standard payment solutions in the internet.

At least that is the opinion of the stock market, because since the separation of eBay (EBAY), the stock has delivered a gain of 440%, outperforming both the S&P 500 and the Nasdaq 100 by far (see following chart).

(PayPal's performance since July 2014 vs. major indices. Source: YCharts).

With a performance of over 80%, the share is also a clear outperformer year-to-date, driven primarily by increased e-commerce adoption and online consumption due to the coronavirus pandemic (see following chart).

(PayPal's year-to-date performance vs. major indices. Source: YCharts).

Consequently, in this article, I would like to discuss if it is still reasonable to invest in PayPal after its steep rise and evaluate how much further potential the shares could have.

(PayPal logo. Source: Pixabay)

2. Which reasons could lead to a further rise in PayPal's share price?

In the following, I have listed five key reasons which, from a fundamental perspective, favor a continued robust and promising future for the company.

First, the area of payment services - alongside cloud computing, e-commerce and tele health - is one of the most promising growth sectors, with annual double-digit growth rates. The companies are usually profitable and/or have increasing, positive free cash flows.

With regard to PayPal in particular, growth has even accelerated as a result of the coronavirus pandemic, so that the company has raised its guidance for FY 2020.


This article was written by

Güner Soysal profile picture
Real Financial Dynamics - Investing In Growth In Every Market Phase. Banker, Investor, Investment Advisor, Wealth Manager, Finance Blogger from Germany. Website | Instagram | LinkedIn | Güner Soysal

Disclosure: I am/we are long V, PYPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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