Why 2023 Could Be a Great Year for PayPal Stock

PYPL is down over 60% year-to-date

Jul 12, 2022 at 2:52 PM

PYPL

PayPal Holdings Inc (NASDAQ:PYPL) announced on June 28 it is expanding its offerings to include a business credit card, which targets small business owners. Last seen up 1.9% to trade at $71.84, the security recently breached a floor at the $70 level to hit a June 30, roughly five-year low of $67.58, with overhead pressure at the 50-day moving average guiding share lower so far in 2022. Year-to-date, PYPL is off 61.9%.

Despite its recent price action, the brokerage bunch is firmly bullish towards PayPal stock. In fact, 23 of the 31 analysts in coverage call the equity a "buy" or better, while only eight say "hold" or worse. What's more, the 12-month consensus target price of $117.14 is a 62.9% premium to current levels.

PYPL 50 Day

It's also worth noting the stock's Schaeffer's Volatility Scorecard (SVS) ranks at 90 out of 100. In other words, the security has exceeded option traders' volatility expectations in the last year.

PayPal stock is approaching an intriguing valuation after losing more than three-fourths of its market cap in the past year. PYPL now trades at a forward price-earnings ratio of 18.9, and a price-sales ratio of 3.36, which are solid figures for a profitable large-cap company expected to produce a high level of revenue growth in the coming years.

The fintech name is estimated to produce 11.4% revenue growth for 2022, and 16.1% revenue growth for 2023. However, PYPL is also on track to wrap up 2022 with a 15.9% decrease in earnings. Still, the company is expected to bounce back in 2023 with 24% earnings growth, potentially setting up PayPal stock for a strong recovery in 2023.

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