PayPal Has 4 Silver Linings in Earnings Report, Says Mizuho Analyst

This post was originally published on this site — PayPal (NASDAQ:PYPL) shares have been under pressure for some time, falling 33% this year alone. The move lower was fueled further by Tuesday’s fourth-quarter earnings report, resulting in a 24% decline.

However, Mizuho analyst Dan Dolev said there were “four silver linings that may have gone unnoticed.”

In a note to clients Friday, Dolev said that despite the “epic de-rating” of PayPal shares, the total payment value per user is continuing to improve. 

“Our analysis shows that PYPL’s share price (lagged by one quarter) closely tracks incremental TPV per user,” the analyst stated, adding that if the “metric continues to improve, the stock is likely to follow.”

Dolev then pointed to the company’s ex-eBay take rate — the rate it takes per transaction — stating it is improving at an accelerating pace, coming in at 2.03% in Q4, up from 1.98% in Q3 and 1.95% in Q2.

Furthermore, Dolev explained that incremental total payment value, excluding eBay, is accelerating and engagement is advancing “very nicely,” while incremental transactions per active account in Q4 were higher when compared to Q3. 

PayPal shares rose 1.6% Friday.