Since being spun off from eBay in July 2015, PayPal (NASDAQ:PYPL), the technology platform company that enables digital and mobile payments, has experienced what amounts to little more than a wild ride to nowhere. The company's stock price has experienced a series of double digit percentage moves up and down, however it currently trades not too far above the price it went for on its first day independent from eBay.

At least one analyst, though, doesn't believe it will be trading in this range for long. A recent Barron's article reported that Jefferies analyst Jason Kupferberg is maintaining a $52 price target on PayPal, an approximate 30% increase from where it currently stands. While Kupferberg cited many reasons for his bullish stance on the company, the most compelling is his conviction that it is poised to capitalize on the growing digital sales trend. Kupferberg wrote:

We believe this trend particularly benefits PayPal as the only true pure-play e-commerce payment provider at scale.

While investing in a company based solely on an analyst recommendation is hardly the Foolish way to invest, sometimes it can be helpful to look at the reasoning behind such recommendations. With that in mind it could be beneficial to ask if Kupferberg is right. Does PayPal's growth runway mirror that of e-commerce? Is PayPal the best way for investors to capture this inevitable growth in online sales?

A mini shopping cart filled with tiny cardboard shipping boxes sits on a laptop keyboard.

Image source: Getty Images.

E-commerce growth is undeniable

Shortly after Black Friday, First Data, the global payments solution company, released a report stating that Thanksgiving and Black Friday sales rose about 9% from the previous year. Unsurprisingly, the data also showed that e-commerce sales grew quicker than sales at physical locations.

This latest data point backs up the larger trend we've seen play out over the past several years and what most of us have experienced in our own personal lives: Online sales are eating away at purchases made at traditional retail locations.

Digital sales might even be growing faster than most investors realize. The Census Bureau recently stated that for the first time ever, e-commerce sales could represent more than 10% of all retail purchases this quarter. But as fellow contributor, Jeremy Bowman, recently pointed out, once business sectors that e-commerce does not traditionally serve are stripped out from the data (e.g. auto sales, gas stations, building materials), online sales represent a much more robust figure of 28.4% of all retail sales.

But can PayPal capitalize on this trend?

On Cyber Monday, the same day First Data's report hit the news, PayPal issued a press release announcing some of the data trends in holiday spending they were seeing. Among other nuggets, the release stated:

We've seen double digit growth in mobile payment volume for Thanksgiving, Black Friday and during the first eight hours of Cyber Monday.

While PayPal didn't release any specific numbers, this bodes well for the company going forward. Of course, this is nothing new to investors who have already been following PayPal closely. The market for digital sales is rapidly growing, but consumers' preference to use PayPal's online and mobile platforms to make online purchases is growing even quicker.

According to the U.S. Census Bureau, online purchases increased 15.6% in the third quarter of 2016 compared to the third quarter of 2015 . That's a pretty heady pace.

Examining PayPal's numbers reveals even better growth. When PayPal reported its quarterly earnings for the third quarter, the number of transactions the company processed increased to 1.5 billion, a 24% year over year increase. PayPal's total payment volume (TPV) increased to 87.4 billion, a 25% increase compared to the previous year's third quarter numbers. What this proves is that PayPal is not only growing alongside e-commerce, but taking an increasingly large market share as well.

An obvious e-commerce winner

After ignoring the trend for too long, giant retailers now recognize the importance of investing in online streams of revenue. Earlier this year Walmart acquired the e-commerce start-up for about $3 billion. This past summer, Macy's announced they were closing 100 stores to (among other things) invest in growing online sales. This year alone, Bed Bath & Beyond purchased two online sales sites, One Kings Lane and after neglecting online sales for far too long.

Trying to pick investment winners and losers in this brave new digital retail world can be tricky. But whether consumers choose to buy their Christmas gifts on or Macy's beefed up website, PayPal makes money on every single transaction facilitated through their platform.

Shoppers have shown that they like the convenience of PayPal and trust the company's security features.  And with over 15 million active merchant accounts, customers can use PayPal's platform almost wherever they click to do their shopping. So if investors want to ride the e-commerce wave for years to come without having to worry about which retailers' efforts will be successful or not, they might want to follow the Jefferies analyst's lead by investing in what might be the most obvious e-commerce winner. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.