PayPal Holdings (NASDAQ:PYPL)
At 10:41 a.m. ET on Monday, shares of PayPal Holdings (NASDAQ:PYPL) had risen 4%, putting it ahead of the S&P 500 index. A positive earnings report from Bank of America was well received by investors, which drove up the PayPal stock price. PayPal also introduced a new app feature called PayPal Incentives, which combines cash-back rewards and merchant offers into a unified shopping experience.
PayPal stock is down 73% from its all-time high in 2021 due to slowing growth and rising competition from Apple. Can it make a comeback?
Then What?
During this period of rising inflation, PayPal’s 429 million active accounts may find the incentives function particularly helpful. The move is partly a reaction to Apple Pay, which has been steadily eating into Mastercard and Visa’s transaction value share of the market.
Apple has a large, dedicated user base and has been increasing the pressure on PayPal stock by adding additional capabilities this year. Last week, Apple announced new high-yield savings account for Apple Card holders, set to launch in the coming months. Apple also introduced its version of “Pay Later” earlier this year.
As a result, PayPal Holdings (NASDAQ:PYPL) active account growth slowed to 6% in the second quarter, down from 16% in the same period in 2021.
What’s Next?
Although PayPal’s stock price has dropped this year, the market continues to be optimistic about the company. According to market analysts, revenue growth for the payments provider is forecasted to be 10% this year and 14% next year. Earnings growth over the next five years is anticipated to average roughly 13% yearly. The company is trading at a projected P/E of 21.2.
PayPal Holdings (NASDAQ:PYPL) growth has slowed due to increased competition, but the company still has a sizable user base. This is evident in the average number of quarterly transactions per account rose by 12%.
PayPal stock is leading today’s stock market bounce. Their fundamentals imply it will continue to be a significant player for the foreseeable future.
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Positive financial services industry news this morning boosted PayPal stock and the market.
Featured Image – Megapixl © Prykhodov
Author Shariq Khan 
