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PayPal Invests in PPRO, Expands in Online Payment Space

Zacks Equity Research
Updated

PayPal Holdings, Inc., PYPL has led a funding round of $50 million in PPRO Group, a London-based company, along with the participation from Citi Ventures and HPE Growth Capital. This move is in sync with its efforts to bolster presence further in the online payment sector.

PPRO is a cross border online payment specialist which supports almost 140 international payment methods across 175 countries. The company offers merchants a smooth way of payments acceptance from customers.

With the latest move, PayPal intends to integrate its own payment platform with that of PPRO. This will make the company’s platform available to the merchants on the latter’s platform.

Further, this will improve the payment options available for the merchants on PayPal’s platform as well.

Coming to the price performance, shares of PayPal have returned 51.8% over a year, outperforming the industry’s rally of 35.2%.



 

Expanding Services Portfolio

PayPal’s continued focus on expanding its services portfolio will continue to improve its market share in today’s digital world.

The company’s recently signed agreement with PPRO strives to enhance the payment acceptance experience of the merchant.

Per the deal, PPRO will provide a range of payment acceptance options to PayPal’s merchants so that their customers worldwide can enjoy the easier payment process through PayPal’s new smart checkout buttons.

Additionally, the recent partnership between Uber and Venmo will enable the customers to pay for Uber Rides and Uber Eats by using Venmo through their PayPal accounts.

We believe all these endeavors will continue to attract merchants and customers to the PayPal’s payment platform. This will continue to drive its top-line growth in the near term as well as in the long haul.

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PayPal Holdings, Inc. Revenue (TTM)

PayPal Holdings, Inc. Revenue (TTM) | PayPal Holdings, Inc. Quote

Growing Investments to Aid Growth

The company’s increasing strategic investments are likely to aid business growth. Its strong focus toward merger & acquisition activities will continue to add to its customer base as well as product portfolio.

Recently, the company’s president and CEO, Dan Schulman has stated that PayPal will be able to male investments worth $3 billion in a year.

In the second quarter 2018, the company completed few buyouts and entered into definitive agreement to acquire few.

PayPal’s latest agreement to acquire Simility will add adaptive risk management capabilities to its product portfolio.

Further, the company announced its plans to acquire Hyperwallet which is in sync with the augmentation of its payout capabilities for e-commerce and marketplace platforms. Further, the buyout of Jetlore has leveraged its portfolio with AI capabilities while iZettle takeover is helping in its global expansion.

Consequently, these investments will continue to help the company in gaining momentum in the digital payment sector.

Zacks Rank & Stocks to Consider

Currently, PayPal carries a Zacks Rank #3 (Hold).

A few better-ranked stocks that can be considered in the broader technology sector are Twitter TWTR, Upland Software UPLD and Cloudera CLDR. While Twitter and Upland Software flaunt a Zacks Rank #1 (Strong Buy), Cloudera carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Twitter, Upland Software and Attunity is currently pegged at 23.1%, 20% and 8%, respectively.

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