Trading Idea: Paypal Holdings (PYPL-US)
Our system triggered an Enter Long Tactical signal on September 14, 2021 that imply a likely bullish acceleration. Paypal looks like a serial outperformer, as the long signal is combined with a strong behavorial score of 10/10. In the US, the % stock participation of Strategic Signal within the Financial Services sector is 77% but only 29% for Tactical signals. That implies that the momentum is weak short term, but positive mid term. According to our Methodology, we should focus only on the more solid stocks and/or when possible a combination of Tactical & Strategic signals.
Paypal is a $ 334 Bn market cap and a technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants. The Company's combined payment solutions, including its PayPal, PayPal Credit, Braintree, Venmo, Xoom, iZettle, and Hyperwallet products and services, comprise its Payments Platform. It operates a two-sided network that links its customers around the globe to facilitate the processing of payment transactions, allowing it to connect merchants and consumers. The Company allows its customers to use their account for both purchase and paying for goods, as well as to transfer and withdraw funds. It enables consumers to exchange funds with merchants using funding sources, which include bank account, PayPal account balance, PayPal Credit account, credit and debit card or other stored value products. The Company also offers consumers person-to-person (P2P) payment solutions through its PayPal Website and mobile application, Venmo and Xoom.
In 2013, PayPal snapped up Venmo as part of its acquisition of Braintree for $800 million. Today, Venmo alone is doing $58 billion in transaction volume per quarter, and that figure is growing at 58% year-over-year. Venmo charges a variety of fees ranging from 3% to 5%. Then PayPal is pulling in minimum of $1.74 billion per quarter in revenue just from Venmo.
And with Venmo comes crypto revenue. Venmo offers a number of cryptocurrency-related services, many of which generate revenue for the company. This includes buying and selling crypto (Bitcoin, Ethereum, Litecoin, and Bitcoin Cash).Venmo doesn't offer crypto payments and remittances yet, but suggests that it might add it.
As for 2021, Paypal is expected to deliver a $ 25.8 Bn revenue coupled with a $ 4.2 Bn net profit. EPS are expected to grow by an average 20% in the next 3 years.
Short term catalyst : Cryptocurrency related services.
This signal looks consistent with the US Financial sector in Major Bullish Trend.