The COVID-19 pandemic led to changes in consumer behaviors that helped providers of cloud-based services, digital payment services, delivery services, e-commerce platforms, and many other businesses thrive over the past year. Consequently…
the shares of major players in these areas have attracted significant investor attention.
Although high inflation raises concerns about significant market volatility in the near term, shares of companies with solid long-term growth prospects could deliver excellent returns in the long-term.
Four such popular stocks are: PayPal Holdings, Inc. (PYPL – Get Rating), Uber Technologies, Inc. (UBER – Get Rating), Marqeta, Inc. (MQ – Get Rating), and ContextLogic Inc. (WISH – Get Rating). Wall Street analysts are optimistic about the upside potential of these stocks and should be on investors’ radar.
PayPal Holdings Inc. (PYPL – Get Rating)
PYPL operates as a technology platform and digital payments company that enables customers and merchants to carry out digital and mobile payments worldwide. Its payments platform allows consumers to transfer and withdraw funds from their bank accounts and hold balances in their PayPal accounts in various currencies. It also offers gateway services that enable merchants to accept payments online with credit or debit cards and digital wallets.
On September 21, 2021, PYPL announced the new PayPal app, an all-in-one, intelligent, and personalized digital wallet. The new PayPal app introduces new features and services, including PayPal Savings, new high-yield savings account provided by Synchrony Bank, bill pay, in-app shopping tools, deals, and rewards, up to two-day early access Direct Deposit, buy, hold and sell crypto, and Buy Now, Pay Later services. These new features are expected to create expanding market reach in the near term.
On September 7, 2021, PYPL announced to acquire Paidy, a leading two-sided payments platform and provider of buy now, pay later solutions in Japan, for $2.7 billion in cash. The acquisition will expand PYPL’s capabilities, distribution, and relevance in the domestic payments market in Japan, improving its existing cross-border e-commerce business in the country.
For its fiscal third quarter ended September 30, 2021, PYPL’s net revenues increased 13.2% year-over-year to $6.18 billion. The company’s non-GAAP net income came in at $1.32 billion for the quarter, marking a 3.5% year-over-year improvement. Its non-GAAP EPS improved 3.7% year-over-year to $1.11. The company had cash and cash equivalents of $7.78 billion as of September 30, 2021.
Analysts expect PYPL’s EPS to improve 19.6% year-over-year to $4.64 in the current year. The consensus revenue estimate of $25.48 billion for the current year represents an 18.8% rise from the prior-year period. It surpassed Street EPS estimates in each of the trailing four quarters. The stock’s EPS is expected to grow at a 20.4% rate per annum over the next five years.
Over the past month, the stock has lost 18.6% in price and closed Friday’s trading session at $208.30. Of 27 Wall Street analysts, 22 have rated the stock Buy, and four rated it Hold. The average price target of $280.48 for the stock indicates a 34.7% upside potential.
Uber Technologies Inc. (UBER – Get Rating)
UBER is a technology platform that offers multi-modal people transportation, ride-sharing, restaurant food delivery, payment processing solutions, and freight carrier and shipper connections worldwide. The company operates through three segments ─ Mobility; Delivery; and Freight.
On November 8, 2021, Serve Robotics, the leading autonomous sidewalk delivery company, announced a partnership with UBER to enable on-demand robotic delivery service to UBER’s UberEats customers starting in Los Angeles early next year. This new kind of safe, reliable, and environmentally friendly delivery service is expected to reach consumers in the upcoming months.
On November 1, 2021, UBER announced it would partner with Bed Bath & Beyond (BBBY) and buybuy BABY to help launch the brand-new baby, and kids vertical in the UberEats app. Due to BBBY’s products’ high demand, UBER’s new baby and kids hub made it easier for parents to get BBBY products on-demand and delivered right to their doors. The company expects to gain good demand in the upcoming months.
UBER’s revenue for the third quarter ended September 30, 2021, increased 72.2% year-over-year to $4.85 billion. The company’s EBITDA came in at $8 million for the quarter, compared to a loss of $625 million in the prior-year period. UBER had $6.48 billion in total cash and cash equivalents as of September 30, 2021.
Analysts expect UBER’s EPS to improve…
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