Baird Reiterates Outperform on PayPal (PYPL) Following 3Q
Baird reiterated an Outperform rating and $45.00 price target on PayPal (NASDAQ: PYPL) following the company's 3Q15 earnings results and conference call. On the call, management indicated that investments in the technology stack are starting to bear fruit. More specifically, PayPal OneTouch is now offered by 50% of the Internet Retailer 500, and 7M users have used the product since mid-Q3 launch with meaningful upticks in conversion rates.
Analyst Colin Sebastian commented, "Good start post-split; global headwinds constrained upside, but secular growth story intact. PayPal reported impressive TPV growth (+27% Y/Y ex-FX vs. consensus +26%), while revenues slightly missed expectations on soft cross-border/international volumes (China export/Europe). More positively, US revenue growth accelerated for the second consecutive quarter (+20% vs. +19% in 2Q15), while engagement trends continue to improve. Given PayPal's merchant momentum., quickening pace of innovation, (e.g., OneTouch, Venmo monetization), and seemingly reasonable valuation, we would be buyers on a pullback."
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Shares of PayPal closed at $36.52 yesterday.