Thompson Investment Management Inc. Purchases 17,043 Shares of PayPal Holdings, Inc. $PYPL

Key Points

• Thompson Investment Management increased its PayPal stake by 7.4%, purchasing 17,043 additional shares to own 246,784 shares valued at approximately $10.7 million. Institutional investors collectively own 68.32% of PayPal.
• PayPal exceeded quarterly expectations, reporting $1.38 in adjusted EPS and $8.68 billion in revenue, with revenue up 4.8% year over year. Venmo’s mid-teens payment-volume growth remains a potential growth driver, though monetization concerns persist.
• PayPal declared a quarterly dividend of $0.14 per share, equivalent to a $0.56 annualized payout and a 0.9% yield. Wall Street’s consensus rating remains “Hold,” with an average price target of $55.72.

Thompson Investment Management Inc. increased its holdings in PayPal Holdings, Inc. (NASDAQ:PYPL - Free Report) by 7.4% during the second quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The fund owned 246,784 shares of the credit services provider's stock after buying an additional 17,043 shares during the quarter. PayPal accounts for about 1.2% of Thompson Investment Management Inc.'s investment portfolio, making the stock its 28th largest position. Thompson Investment Management Inc.'s holdings in PayPal were worth $10,656,000 at the end of the most recent quarter.

A number of other hedge funds and other institutional investors have also added to or reduced their stakes in PYPL. Maia Wealth LLC grew its position in shares of PayPal by 2.5% during the 3rd quarter. Maia Wealth LLC now owns 6,404 shares of the credit services provider's stock valued at $424,000 after acquiring an additional 155 shares during the period. GeoWealth Management LLC grew its holdings in PayPal by 6.2% during the third quarter. GeoWealth Management LLC now owns 3,214 shares of the credit services provider's stock valued at $216,000 after purchasing an additional 188 shares during the period. Formidable Asset Management LLC increased its position in PayPal by 0.8% in the first quarter. Formidable Asset Management LLC now owns 25,937 shares of the credit services provider's stock worth $1,173,000 after buying an additional 205 shares in the last quarter. KPP Advisory Services LLC increased its position in PayPal by 3.3% in the first quarter. KPP Advisory Services LLC now owns 6,625 shares of the credit services provider's stock worth $300,000 after buying an additional 214 shares in the last quarter. Finally, Jackson Thornton Wealth Management LLC lifted its position in shares of PayPal by 3.5% during the 1st quarter. Jackson Thornton Wealth Management LLC now owns 7,110 shares of the credit services provider's stock valued at $322,000 after buying an additional 238 shares in the last quarter. 68.32% of the stock is owned by hedge funds and other institutional investors.

PayPal Price Performance

PYPL opened at $59.20 on Thursday. The company has a current ratio of 1.29, a quick ratio of 1.29 and a debt-to-equity ratio of 0.55. The business's fifty day simple moving average is $49.37 and its 200-day simple moving average is $47.15. The company has a market capitalization of $50.64 billion, a price-to-earnings ratio of 11.19, a PEG ratio of 1.44 and a beta of 1.30. PayPal Holdings, Inc. has a 12-month low of $38.46 and a 12-month high of $79.21.

PayPal (NASDAQ:PYPL - Get Free Report) last issued its quarterly earnings data on Tuesday, July 28th. The credit services provider reported $1.38 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.28 by $0.10. PayPal had a net margin of 14.36% and a return on equity of 24.39%. The company had revenue of $8.68 billion for the quarter, compared to analyst estimates of $8.47 billion. During the same period last year, the company posted $1.40 earnings per share. PayPal's revenue was up 4.8% compared to the same quarter last year. On average, equities research analysts anticipate that PayPal Holdings, Inc. will post 5.37 earnings per share for the current fiscal year.

PayPal Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Friday, September 25th. Investors of record on Friday, September 4th will be issued a dividend of $0.14 per share. This represents a $0.56 annualized dividend and a yield of 0.9%. The ex-dividend date of this dividend is Friday, September 4th. PayPal's dividend payout ratio (DPR) is 10.59%.

Key Stories Impacting PayPal

Here are the key news stories impacting PayPal this week:

• Positive Sentiment: Venmo growth supports the recovery story. Venmo’s total payment volume is growing at a mid-teens rate, giving PayPal an important source of transaction growth. Increasing adoption of products such as payments, credit and other monetization tools could help convert that activity into faster revenue growth. PayPal's Venmo: Can Monetization Sustain Its Mid-Teens Growth?
• Positive Sentiment: Recent earnings and operational improvements remain supportive. PayPal reported quarterly earnings of $1.38 per share, ahead of the $1.28 consensus estimate, while revenue of $8.68 billion also exceeded expectations. Commentary highlighting improvements under CEO Enrique Lores and PayPal’s strong July performance has reinforced the view that the company may be stabilizing after a difficult period. Jim Cramer Examines PayPal Holdings Performance Under Enrique Lores and M&A Speculation
• Neutral Sentiment: Valuation and M&A speculation are influencing sentiment. Analysts and commentators are debating whether PayPal remains undervalued following its recent share-price gains. Reported speculation about a potential buyout proposal has added an additional catalyst, but there is no confirmed transaction, making this a source of volatility rather than a firm fundamental driver. Is PayPal Holdings (PYPL) Undervalued After Earnings And Its Recent Share Price Jump?
• Negative Sentiment: Investors remain concerned about monetization and the sustainability of growth. Venmo’s strong payment-volume expansion will not necessarily produce comparable revenue growth unless PayPal can increase product usage and monetization. After the stock’s sharp recent advance, any evidence that revenue conversion or profitability is lagging expectations could limit further upside. PayPal's Venmo: Can Monetization Sustain Its Mid-Teens Growth?

Wall Street Analyst Weigh In

PYPL has been the topic of a number of analyst reports. Truist Financial set a $59.00 target price on shares of PayPal in a research note on Wednesday, August 5th. TD Cowen boosted their price target on shares of PayPal from $48.00 to $59.00 and gave the stock a "hold" rating in a research note on Wednesday, July 29th. Clear Str raised PayPal to a "hold" rating in a report on Thursday, July 16th. Zacks Research raised PayPal from a "strong sell" rating to a "hold" rating in a research note on Friday, April 17th. Finally, Telsey Advisory Group downgraded PayPal to a "market perform" rating in a research note on Friday, July 24th. Nine equities research analysts have rated the stock with a Buy rating, thirty-four have given a Hold rating and four have issued a Sell rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of "Hold" and a consensus target price of $55.72.

Insider Activity at PayPal

In other news, CAO Chris Natali sold 1,337 shares of the firm's stock in a transaction that occurred on Wednesday, July 29th. The shares were sold at an average price of $58.10, for a total transaction of $77,679.70. Following the sale, the chief accounting officer owned 2,216 shares of the company's stock, valued at $128,749.60. This trade represents a 37.63% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Suzan Kereere sold 3,379 shares of the company's stock in a transaction dated Wednesday, June 3rd. The stock was sold at an average price of $42.79, for a total transaction of $144,587.41. Following the completion of the transaction, the insider owned 30,983 shares of the company's stock, valued at approximately $1,325,762.57. This trade represents a 9.83% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 10,612 shares of company stock worth $484,534. 0.63% of the stock is owned by corporate insiders.

About PayPal

PayPal Holdings, Inc operates a global digital payments platform that enables consumers and merchants to send and receive payments online, on mobile devices and at the point of sale. The company provides a broad set of payment solutions, including a digital wallet, merchant payment processing, checkout services, invoicing and fraud-management tools. PayPal's platform is designed to support e-commerce, in-person retail and person-to-person transfers, targeting both individual consumers and businesses of varying sizes.

Key products and services in PayPal's portfolio include the PayPal wallet and checkout ecosystem, the Venmo peer-to-peer mobile app, Braintree's developer-focused payment gateway, Xoom for international money transfers, and PayPal Credit and buy-now-pay-later options.

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