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The Stock of Paypal is Enjoying Its Best Three-day Run in 14 Months as It Prepares for a Key Event

January 21, 2024
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PayPal Holdings Inc. is concluding the week on a positive note, with its stock experiencing a notable upswing. In Friday afternoon trading, shares of the payment-technology company were surging by 5.5%, positioning it as the second-best performer in the S&P 500 with approximately two hours remaining in the trading session. This upward momentum is steering the stock toward its highest closing value since August 2, 2023, when it concluded at $73.20.

Adding to its impressive performance, PayPal is currently on a three-session winning streak, marking a cumulative gain of 12.1% during this period. According to data from Dow Jones Market Data, this consecutive rise positions the stock for its most robust three-day stretch since the period concluding on November 14, 2022.

The week commenced with a slightly less optimistic outlook for PayPal's stock, following a downgrade by Mizuho analyst Dan Dolev on Tuesday. This downgrade resulted in more than half of the analysts covering the company refraining from recommending it with a buy-equivalent rating—a scenario unprecedented for PayPal, as indicated by monthly data.

Dolev's concerns revolved around PayPal's margins, particularly as the less-profitable unbranded checkout gains prominence within its business mix. Additionally, he expressed apprehensions about increasing competition, highlighting Apple Inc.'s Apple Pay as a growing force, especially with the surge in mobile shopping activities.

In response to these concerns, Chief Executive Alex Chriss, who assumed the role in September, took steps to reassure investors during a CNBC appearance on Wednesday. Chriss conveyed a clear understanding of the challenges, stating, "It is very clear what we need to do," and announced the company's intention to unveil new "customer-backed innovation" at an event scheduled for the following Thursday.

Chriss acknowledged that PayPal has fallen short of delivering the expected value proposition to both consumers and merchants in recent years, but expressed confidence in the company's capability to address these shortcomings. The commitment to introducing innovative solutions aligns with PayPal's strategy to regain its competitive edge and meet the evolving needs of the market.

As the week unfolds, PayPal's stock performance and strategic initiatives under Chriss's leadership are closely watched, with investors eager to assess the impact of the upcoming "customer-backed innovation" on the company's trajectory and market standing.

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Valentyna Semerenko
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