After hovering between high 30s and low 40s for the better part of the last one year, PayPal (NASDAQ: PYPL) started breaking out in April and went from $42.63 to $54.39 (June 8). Thing to see is if the stock has reached its max potential for a while or is there still room for mid-to-long term growth that value investors can still take advantage of.
Reaction to Wall Street Opinions
Confidence Meter, reflecting Wall Street analysts’ opinion on PayPal, has been consistently robust – we’ve seen levels in excess of 70% for over 3 months now. And while it fell from 81% to 73% over the last month, the stock has continued to enjoy generally positive sentiment from Wall Street experts.
As is apparent, at least on two instances – one when Confidence Meter went up from 73% to 81% and other when it fell from 81% to 73% – the stock price reaction has been in-line with the analyst predictions. The second instance is of greater significance for this piece as that has yielded a 3-month target of $45.67.
Fundamentals and Highlights
Significantly, the long term indicators are looking positive.
While a PE ratio of 36.1 is generally on the higher side, when compared with some of the other stocks in our “payment” category, it’s not that high – Mitek is at 95 and Global Payments is at 39. So there just might be room for growth in the long term.
The other indicator that’s one of our favorites is the Revenue Prediction and for PayPal, the next four quarters look promising. The next earnings announcement might see a repeat performance of the last one and the three subsequent ones are predicted to show reasonable and consistent growth.
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