PayPal has dropped 16% this week, but one top analyst is making a long-term bullish case for the struggling stock.
The company’s underperformance entails leadership uncertainty. PayPal’s chief financial officer, John Rainey, announced last week that he would be leaving the company at the end of May. However, Akshata Bailkeri of Bruderman Asset Management made an optimistic case for PayPal on CNBC.Quick money” this week.
The company’s equity analyst prefers this stock for three reasons:
Bailkeri, which owns PayPal stock, thinks sales will increase in the post-pandemic world.
“We believe this online percentage of retail sales will grow by 2023,” said Bailkeri. “PayPal is its primary beneficiary.”
She thinks that PayPal being an independent company also bodes well for the stock. While the company’s stock is currently lower, PayPal stock hit an all-time high last July.
“EBay “The company has experienced significant growth even after withdrawing from the company in 2015,” says Bailkeri.
PayPal is trading at a significant growth-adjusted discount rate relative to its competitors, according to Bailkeri. She sees the stock’s volatility as a buying opportunity to profit over the next five years.
“You’re looking at long-term online trends and the growing cash-to-cashless movement,” she said. “That’s more reflective in the five-year view than it might be in the next few quarters.”
Overall, Bailkeri projects double-digit percentage returns for PayPal over the next five years due to strong secular trends.
“People will continue to shop more online and have more payments in the digital space,” she said.
PayPal, which reports earnings on Wednesday, is down 26% so far this month.