The PayPal (NASDAQ:) selloff is overdone, analysts at Mizuho said, repeating a buy rating and $92 price target on the stock in a note to clients on Thursday.
PayPal shares fell more than 12% on Tuesday afternoon and another 3% on Wednesday, falling below $63. The stock is currently up 1.4% at around $64.29 per share.
“PYPL shares fell sharply after earnings despite an acceleration in Branded Checkout TPV growth,” the analysts said, adding that “the decline in the transaction acceptance rate of approximately 6 bps year-on-year was one of the main culprits”.
“Management attributed the pressure to a combination shift to Braintree’s less profitable business, which is growing 5x faster than brand payout. Given that this does not explain 100% of the decline, many investors are concerned about the widespread price pressure in PYPL’s business,” they added.
However, analysts said the company’s deep dive shows that although acceptance rates declined for Branded Checkout in the first quarter, it reflected a shift in the mix towards larger enterprises and lower-rate geographies. lower acceptance.
“On a like-for-like basis, prices were flat for both branded and non-branded products, which we believe exaggerates the negative stock reaction,” they concluded.