PayPal stock forecast

PayPal Stock Forecast: Is PYPL stock oversold in 2022?

PayPal (NASDAQ: PYPL) stock has been hammered this earnings season, now trading 34% lower this month. The companies Q4 results reported slowing revenues and a bleaker than expected outlook for 2022, sending the stock into free fall. In similar fashion, Meta Platforms and Netflix also dropped roughly 25% on the day of reporting, illustrating the unforgiving nature of the market right now.

However, PayPal is now trading at a 52 week low and investors are beginning to wonder if the worst is over for PayPal Stock. Is PayPal stock oversold? This article will breakdown everything investors need to know about the PayPal Stock Forecast in 2022.

What are analysts saying about PayPal? 

Analysts coverage on Paypal stock, to a large extent has shifted since the companies Q4 results. Amongst 50 Wallstreet analysts, the average price target stands at $188, down from $280 one month ago. However, majority of the recent downgrades still price in an upside from PayPal’s current trading price.

This suggests although analysts are practising caution based on the companies outlook, Wallstreet still see value in PayPal Stock at its current price.

Last Wednesday, Morgan Stanley analyst James Faucette lowered the firm’s price target on PayPal to $190 from $217 following the companies earnings. The analyst sees the disappointing results as a product of disappointing e-commerce growth and supply chain disruptions. However, Faucette remains upbeat on PayPal stock focusing on the overall e-commerce growth expected to normalise over the coming quarters.

The lowered target from Morgan Stanley still implies a 55% upside on PayPal stock. JPMorgan analyst Tien-tsin Huang also lowered their firms target on PayPal to $190, citing lower than expected forecasts for 2022. However, like James Faucette, Huang sees the lowered expectations reversing over the coming quarters.

Paypal stock target

Growth catalysts for Paypal Stock in 2022

PayPal’s future catalysts will likely revolve around new currencies and business models joining the economy. The decision to allow users to buy, hold, and sell cryptocurrency will not fade as a catalyst. The initial adoption of cryptocurrency includes Bitcoin, Etherium, Bitcoin Cash, and Litecoin. The insurgence of new cryptocurrencies will see PayPal’s digital wallet offering expand.

On Tuesday, PayPal intitiated an advisory council focused on Blockchain and Digital currencies. PayPal said the decision to set up the advisory board will “support not only our current and future products in the space but our broader mission of leading the way towards a more affordable, efficient and inclusive digital financial system”.

What are the risks involved with Paypal stock?

Firstly, as Paypal places more emphasise on Cryptocurrency within its core business, investors should expect a greater firm-specific volatility. The shift in crypto-cycles can play a huge role in the success of a business that deals directly and even indirectly with cryptocurrency.

In addition, following the companies 25% sell-off investors confidence in the companies stock will be bruised. However, as argued by JP Morgan, the lowered expectations may be the necessary reset PayPal need to begin beating expectations once again.

PayPal stock forecast: Key Takeaways

Overall, PayPal’s start to 2022 is not ideal with bruised investor sentiment and sluggish revenues playing a key role. The shift on Wallstreet with lowered targets is also a hit to bulls. However, the targets from analysts suggest Wallstreet values PayPal Stock above the current trading price.

The introduction of a cryptocurrency advisory board should create more catalysts in the future and encourage greater investments in adopting blockchain and digital currencies on its platform. We will continue to update our viewers on any Paypal changes in forecasts as we move through 2022.

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The content above is strictly for informational purposes only and is not financial advice nor does it constitute a recommendation. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.