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PayPal's First-Ever Analyst Day Should Be A Positive For The Stock

PYPL - PayPal's First-Ever Analyst Day Should Be A Positive For The Stock

Jefferies’ Jason Kupferberg maintains a Buy rating on the company, with a price target of $48.

Analyst Day Expectations

Kupferberg believes that the Analyst Day “represents an opportunity for PYPL to showcase more breadth and depth of its management team, products, and technology, which we are inclined to believe will be positively received.”

The analyst expects the Street to look for deeper insight into the company’s credit businesses, the competitive landscape, Venmo, capital allocation, take rate and medium-term financial targets, in order to allay concerns regarding the risk profile.

As of March 31, PayPal Credit has balance worth $3,98 million, significantly larger than Working Capital, which was at $488 million.

Medium-Term Targets

Kupferberg pointed out that the company has announced its medium-term financial targets in the summer of 2015, which included CAGR in the mid-20 percent for total payment volume, with 15 percent revenue CAGR, “stable to growing non-GAAP operating margins, FCF growth in-line with top-line growth, and capex lower than the 2015 levels of 8 percent.”

Although PayPal is unlikely to alter these targets, the analyst believes that there would be expectations of greater clarity on the term or duration of the guidance.

Kupferberg mentioned that PayPal continued to be Jefferies’ Franchise Pick.

DateFirmActionFromTo
Apr 2016UBSMaintainsNeutral
Apr 2016CitigroupMaintainsBuy
Apr 2016Compass PointInitiates Coverage onNeutral

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