Please ensure Javascript is enabled for purposes of website accessibility

Analyst: PayPal Holdings Has 46% Upside Thanks to Bitcoin Surge

By Eric Volkman - Jan 16, 2021 at 1:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company has caught bitcoin fever just in time, and should benefit handsomely.

One prognosticator following PayPal Holdings (PYPL -1.50%) feels the company is deserving of far more investor love. In a research note circulated on Friday, Dan Dolev of Mizuho Securities raised his price target on the stock to a "street high" of $350 per share, quite a hike from the previous $290. His recommendation, not surprisingly, is a buy. The new level is 46% higher than the shares' most recent closing price.

One big factor is at play with Dolev's increase -- bitcoin specifically, and cryptocurrencies generally.

Bitcoin in front of financial graph display on monitor.

Image source: Getty Images.

"Both our survey and management commentary unveil a dramatic increase in engagement due to crypto," he wrote in his note. He pointed out that PayPal said 50% of its users active in cryptocurrency were interacting with the company's app on a daily basis.

Dolev believes that this activity will add roughly 10% to PayPal's adjusted net revenue in 2023, or around $2 billion.

PayPal and cryptocurrency are recent partners. Following a pilot program, in November the company opened cryptocurrency services to all customers throughout the various PayPal services. At the time, it said it would roll this out to its popular peer-to-peer service Venmo too.

In doing so, PayPal was and is heeding high demand for such functionality. In a recent company earnings call, CEO Daniel Schulman said that "our base is very eager for us to offer these capabilities."

Cryptocurrencies have been on a serious tear lately. This rally has been led, as ever, by pace-setter bitcoin. In just the last month, even after several pull-backs, one bitcoin has zoomed in value to over $36,843 from a shade over $19,194.


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

PayPal Holdings, Inc. Stock Quote
PayPal Holdings, Inc.
$77.65 (-1.50%) $-1.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.