5 Most Profitable Cryptocurrency Stocks

4. Paypal Holdings, Inc. (NASDAQ:PYPL)

Trailing Twelve Months Net Income: $2.4 billion

Number of Hedge Fund Holders: 115

Paypal Holdings, Inc. (NASDAQ:PYPL) is a data processing and outsourced services company that operates its own digital transactions platform and is based in California, United States. The company spans around 200 markets and 150 currencies.

BMO Capital’s James Fotheringham holds an Outperform rating on Paypal Holdings, Inc. (NASDAQ:PYPL) shares as of February 13.

The company’s normalized earnings per share saw a 15% quarter-on-quarter growth in the last quarter of 2022 and its bottom lines were 3% to 4% above the market’s consensus EPS and expected earnings estimate for the quarter. The overall year of 2022 also saw an 8.5% growth in revenue as compared to 2021 while the total payment volume increased from $1.25 trillion in the fiscal year 2021 to $1.36 trillion in the fiscal year 2022 with this trend expected to continue.

A total of 115 hedge funds were long Paypal Holdings, Inc. (NASDAQ:PYPL) in the fourth quarter, with a total stake value of $5.1 billion.

RiverPark Advisors, an investment advisory firm, mentioned Paypal Holdings, Inc. (NASDAQ:PYPL) in its fourth-quarter 2022 investor letter. Here’s what the firm said:

“PayPal Holdings, Inc. (NASDAQ:PYPL)l: PayPal shares were a top detractor for 4Q, reporting slightly weaker than expected 3Q payment volumes and 4Q payment volume guidance. The company nevertheless reported betterthan-expected EPS on improved margins. PYPL operates at significantly lower margins than its payment competitors Visa and Mastercard, and 3Q results and 4Q guidance show early improvements in its margins and ability to drive higher cash flow growth in the near term. For 3Q, PYPL reported $1.8 billion of FCF, the highest quarterly FCF number in its history, representing 37% growth. The company expects continued operating margin expansion for 4Q and full year FCF of more than $5 billion, representing a 6% FCF yield.

PayPal is the most accepted digital wallet – with almost triple the acceptance of Apple Pay, the number two digital wallet. PayPal is a key beneficiary of the ongoing shift to ecommerce driven digital payments, as well as consumer-to-consumer payment trends through its Venmo peer-topeer (P2P) payment service. With a 3Q non-GAAP operating margin of 22%, PYPL also has significant margin expansion potential given that competitors Adyen, Visa and Mastercard have 50%-65% operating margins. We believe the combination of secular growth, expanding operating leverage and the strategic use of the company’s significant and growing cash balance should fuel high teens earnings growth over the next five years. This, to us, presents an excellent risk/reward given that PYPL trades at a below market multiple.”