PayPal (NASDAQ:PYPL) stock is in the spotlight as it closed lower due to the rising competition in the digital payment space. The latest challenge arises from Apple’s (NASDAQ:AAPL) announcement of a new feature simplifying money transfers through Apple Cash at its annual Worldwide Developers Conference (WWDC).
Apple’s new “Tap to Cash” feature allows users to send and receive Apple Cash by holding two iPhone devices together. This innovation will likely intensify competition in the already-crowded digital payment space, potentially impacting companies like PayPal.
Citi Lifts PYPL’s Price Target
In a separate development, Citi analyst Andrew Schmitt raised the price target on PYPL stock to $81 from $79 on June 10, despite competitive headwinds. The analyst maintained a Buy recommendation on PayPal stock as he believes that the company’s strategic transition plan is progressing well.
It’s noteworthy that PayPal’s revenue increased 9% to $7.7 billion in Q1 of Fiscal 2024. This reflects an increase of 14% in payment volumes. Further, PayPal’s payment transactions per active account increased by 13% to 60 on a trailing 12-month basis.
PayPal is strengthening its competitive positioning by expanding its product portfolio. The company is focusing on accelerating growth and driving profitability. PayPal aims to streamline the checkout process, making it easier to pay with PayPal by reducing friction. Upcoming enhancements include transitioning to password-less authentication methods, such as biometrics, and launching a redesigned mobile checkout experience, which is expected to boost conversion rates.
Is PayPal a Buy, Sell, or Hold?
PayPal stock is up about 9% year-to-date. Further, Wall Street analysts are cautiously optimistic about PYPL stock. It has a Moderate Buy consensus rating based on 14 Buys and 15 Hold recommendations.
The analysts’ price target on PYPL stock is $74.32, implying 10.78% upside potential from current levels.
