Is PayPal Stock A Good Buy For 2016?

  • PayPal has a powerful brand image.
  • Despite competition, PayPal continues to find avenues for growth.
  • PayPal stock has strong momentum heading into 2016.

Paypal Holdings (NASDAQ:PYPL) is ingrained in the public's consciousness as a reliable way to pay and get paid for services and products online. And as consumers continue to ramp up on online spending, this is a company well-placed to ramp up revenue and increase its dominance.

Note: You might also be interested in 'PayPal stock is a buy at current price'

Moreover, in order to become a major player in the growing realm of mobile payments, PayPal acquired Venmo, a person-to-person mobile payments processor.

Although there are certain potential limiting factors to PayPal's growth (more on that later), they seem to have the momentum going into 2016.

Competition

There is no shortage of online payments processors popping up on a daily basis; however, in this industry, trust is everything. In this regard, the payments giant continues to find ways to make it easier for businesses to integrate with the platform. For instance, they recently launched an inexpensive in-person payments device.

It is worth noting that PayPal's strength lies in their brand image. The way some sellers view them is contentious; however, they ensure that buyers have a smooth and safe purchasing experience.

The issue competing online payments processors are having is that consumers are less likely to share their details with a company they have never heard of, and therefore don't trust. In fact, PayPal's buyer protection is so popular that some consumers refuse to buy from sites that don't accept PayPal .

Apple (NASDAQ:AAPL) hopes that its Apple Pay offering could allow them to take a significant chunk of PayPal's market share. However, the big caveat is that one needs an Apple device to use Apple Pay- and they aren't exactly cheap. Therefore, all Apple can hope for is to convert its own consumers from PayPal to Apple Pay.

On the other hand, consumers and businesses are spoilt for choice with PayPal . From Wordpress plugins to an app for every mobile platform, PayPal have ensured that anyone with a beating human heart can pay and receive money using their service.

PayPal performance

A big brand image, and ubiquitous entry points are major positives for a company to have; however, they will mean little without the figures to back them up. In this regard, PayPal excels.

For Q3 2015, PayPal accrued $2.26 billion in revenue, which was 15% higher than their Q3 2014 revenue figure. Importantly, they have managed to achieve this in the face of aggressive marketing pushes from Apple Pay, Stripe, and Square (NYSE:SQ). Moreover, PayPal's EPS growth came in at an impressive 29% on a year-over-year basis.

PayPal processes 100 currencies and has a presence in 200 countries. This is market penetration which none of its competitors can boast of. When we consider the fact that PayPal's Venmo is beginning to find its footing with an astounding 200% growth in transactions handled, PayPal is set to become a behemoth payments processor.

Conclusion

In conclusion, PayPal continues to go from strength-to-strength. Competitors such as Apple Pay and Square are putting up a good fight; however, they don't have the market penetration, branding power, or customer satisfaction which PayPal enjoys.

All things considered, PayPal stock is well placed to go into 2016 with a strong momentum behind it. And with ecommerce transactions set to go up due to a consumer trend towards increased online spending, one could state that everything is playing into the hands of PayPal. PayPal stock is a long going into 2016.

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  • I do not have any business relationship with the companies mentioned in this post.
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Comments on this article and PYPL stock

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formset
bearish
Notwithstanding the constant flow of disingenuous nonsense from eBay/PayPal, the share prices of these two clunky operators demonstrate the reality ...

August 2007: AMZN ~$40; EBAY ~$40 ...
June 2015 (pre eBay-PayPal split): AMZN ~$430; EBAY ~$66 ...
Currently: AMZN ~$662; EBAY ~$28; PYPL ~$37—LOL ...

The "spin-off" of PayPal from eBay is a sham; eBay and "PreyPal" remain joined at the hip, and anyone that thinks otherwise is naïve in the extreme; and, thanks to a continuation of most of the imbecilic policies introduced over the eight years (2007–2015) of the reign by the "Pain from Bain", John Joseph Donahoe II, the eBay marketplace is continuing on its journey down the toilet. Nevertheless, this cretin and his gang of hand-picked Keystone Kops were, during this same time, still able to pay themselves massive, unearned, "performance" bonuses.

The reality is, the great majority of PayPal's business still comes from its effectively mandated place on the eBay marketplace, and it follows that—with or without the cretinous Johnny Ho-Ho-Ho sitting at the head of the PayPal boardroom table—"PreyPal" will be following eBay on its journey to the sewage farm; this clunky payments intermediary has little long-term future outside of the atrophying eBay marketplace now that professional online payments offerings from MasterCard ("MasterPass") and Visa ("Visa Checkout") are available to any merchant with a credit card merchant account with a real bank ...

Pierre Omidyar can now only dream about how much more fabulously wealthier he might have been had he not let the cretinous Johnny Ho loose in the eBay corner office; yet, incomprehensibly, he has now allowed this headless turkey to occupy the seat at the head of the boardroom table at "PreyPal."—LOL!

Regardless, eBay is, demonstrably, likely to be (still) the most unscrupulous commercial entity operating on this planet; but, have no fear, eBay is an equal opportunity fraudster—they will knowingly aid and abet the defrauding of both buyers and sellers—as long as there is a financial benefit in such fraud for eBay; and if anyone thinks that "PreyPal" is any more scrupulous, given their utterly unprofessional mediation of transaction disputes, good luck to you ...

And now eBay is inviting you to list your unwanted gifts on their auction website. And if you don't know what your unwanted gift may be worth, take eBay's advice and start the auction at 99c and watch the fun—as your item finally sells for 99c—always presuming you aren't bidding on the auction yourself; then you will likely finish up buying it yourself—LOL ...
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