Three reasons this struggling fintech stock may break out of its slump
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PayPalWhile the stock dropped 16%, one of its top analysts is calling for a long-term bullish case for struggling stocks.
Leadership uncertainty is the reason for the poor performance of PayPal. John Rainey (Palm’s Chief Financial Officer) announced that he will be leaving the company at the end of May. Akshata Baileykeri from Bruderman Asset Management made a strong case for PayPal during CNBC’s “Rather than Fear” segment.Fast MoneyThis week.
Three reasons the firm’s equity analyst loves this stock:
1. Sales could increase after a pandemic.
Bailkeri’s firm holds shares in PayPal and believes that sales will increase after a pandemic.
Bailkeri said, “We think that the online percent of these retail transactions should pick up by 2023.” PayPal is the main beneficiary.
2. Its sale to eBay makes it a profitable venture.
Her belief that PayPal can be a standalone company bodes well to the stock is also supported by her. Even though PayPal stock is now lower than it was last July, its shares still reached record highs.
“EBayBailkeri stated that the company is not an “overhang” anymore. The company experienced significant growth after the spin-off in 2015.
3. This is a great value over five years.
Bailkeri says PayPal is traded at a large discount in growth-adjusted terms compared to other companies. Bailkeri views the stock’s volatility in the future as an opportunity to make gains.
She said, “You are looking at long-term trends online and movements from cashless growing to cash” That’s more applicable in five years than in the next few quarters.
PayPal’s future
Bailkeri projects that PayPal will see double-digit percent returns over the next five, due to solid secular trends.
She said that people will continue to shop online, and receive more digital payments.
PayPal has reported earnings this Wednesday and is currently down 26%.
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