PayPal Holdings Inc (NASDAQ: PYPL) Could Have Better Performance in the Long Term

Despite PayPal Holdings Inc (NASDAQ: PYPL) being swept up in the technology stock sell-off, analysts believe that the company’s long-term performance will be positive. However, the same can’t be said for its short-term performance, which is steadily declining like most e-commerce companies.

Why PayPal has been declining 

Since July, the company’s stock has gone down by 70%. This means that the stock gained from the pandemic has been erased. The reasons are the return to in-person shopping as pandemic restrictions ease and the inflation, which has made things more expensive. While experts don’t know how long the inflation will continue to affect PayPal, they predict a quick recovery.

Analysts expect the company to have earnings per share (EPS) of $0.88. This amount is a decline of 27.9% over the year. They also expect the company to make revenues of $6.41 billion, increasing 6.3% over the year.

The predictions on PayPal’s earnings before its earnings calls vary. The reason might be analysts noticing the decline in PayPal. Zacks Analyst warns investors to watch out for changes before deciding whether to sell or buy.

Juniper Research does a study on digital wallet vendors

However, Juniper Research conducted a study that showed that digital wallet transactions will reach $12 trillion by 2026. The value is currently at $7.5 trillion. Juniper also gave a few recommendations for digital wallet vendors. For instance, it advised them to offer services like credit and loyalty rewards to widen its revenue.

PayPal was among the leading companies that Juniper Research mentioned. Others include AliPay, Apple Pay, Google Pay and WeChat Pay. One study author, Damla Sat, stated that the market is extremely saturated.

However, companies like PayPal have still managed to offer many varied services. PayPal has also started valuable collaborations with top merchants who now sell its products.

The research also predicts how companies will diversify their offerings. For example, it predicts that vendors will include cryptocurrencies and buy now pay later services.

One reason digital wallet vendors have seen tremendous growth this year is the increased number of merchants accepting digital wallets at checkouts. It also predicts that their long-term growth can be sustained by APIs connecting financial institutions to local retailers.

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Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing.