PayPal to Snap Up Paidy for $2.7B; Street Says Buy

Financial technology company PayPal Holdings, Inc. (PYPL) recently announced that it has agreed to acquire Paidy, a Japanese two-sided payments platform and buy now, pay later solutions provider, for $2.7 billion. The deal is likely to close in the fourth quarter of 2021.

The buyout will strengthen PayPal’s presence in Japan, the third-largest Ecommerce market in the world, and also boost its capabilities, distribution and relevance in the domestic payments market in the country.

With the purchase of Paidy, PayPal will gain access to the company’s more than six million registered users. Further, Paidy’s proprietary technology to assess creditworthiness, underwrite transactions and guarantee payment to merchants will also help PayPal to enhance its offerings.

The Head of Japan at PayPal, Peter Kenevan, said, “Combining Paidy’s brand, capabilities and talented team with PayPal’s expertise, resources and global scale will create a strong foundation to accelerate our momentum in this strategically important market.” (See PayPal stock chart on TipRanks)

Recently, Wolfe Research analyst Darrin Peller reiterated a Buy rating on the stock with a price target of $360. The analyst’s price target implies upside potential of 22.8% from current levels.

According to the analyst, PayPal’s launch and scaling of a trading platform will give the company a new revenue earning source. The analyst, however, expects the same to be launched not before 2022.

Consensus among analysts is a Strong Buy based on 23 Buys and 3 Holds. The average PayPal price target of $337.70 implies upside potential of 15.2% from current levels.

PayPal scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 57.7% over the past year.

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