3. PayPal Holdings, Inc. (NASDAQ:PYPL)
Lakehouse Capital’s Stake Value: $17,596,000
Percentage of Lakehouse Capital’s 13F Portfolio: 9.93%
Number of Hedge Fund Holders: 143
Lakehouse Capital owns 67,624 shares in PayPal Holdings, Inc. (NASDAQ:PYPL) as of September, worth $17.5 million. The stock accounts for 9.93% of the firm’s Q3 investments. PayPal Holdings, Inc. (NASDAQ:PYPL) is a financial technology company that enables online money transfers in exchange for a service fee.
As of the second quarter of 2021, 143 hedge funds were bullish on PayPal Holdings, Inc. (NASDAQ:PYPL), with a total stake value of $16.35 billion. Terry Smith’s Fundsmith LLP is the leading PayPal Holdings, Inc. (NASDAQ:PYPL) stakeholder, holding 12.28 million shares valued at $3.1 billion.
PayPal Holdings, Inc. (NASDAQ:PYPL) posted its Q3 results on November 8. EPS in the period equaled $1.11, beating estimates by $0.03. Revenue for the third quarter totaled $6.18 billion, missing analysts’ consensus estimates by -$51.87 million.
UBS analyst Rayna Kumar on November 17 assumed coverage of PayPal Holdings, Inc. (NASDAQ:PYPL) with a Buy rating and a $263 price target. The analyst believes that demand for PayPal Holdings, Inc. (NASDAQ:PYPL)’s services has grown majorly since the COVID-19 pandemic, and the pull back following its Q3 earnings offers an attractive buying opportunity.
Here is what Alger has to say about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q3 2021 investor letter:
“PayPal Holdings, Inc. was among top detractors from performance. PayPal is a pure play on e-commerce and electronic payments which is driving the company’s high unit volume growth. As a digital payments company, it is helping to facilitate the shift to a cashless society. The coronavirus pandemic has significantly accelerated the adoption of e-commerce and the utilization of digital payments platforms. In our view, PayPal is currently positioned to benefit from the strength in e-commerce trends, including increasing net new active users and increased engagement per user. PayPal also has launched a service enabling its customers to buy, hold and sell cryptocurrency directly from their PayPal account. PayPal’s vision is to become a Super App that integrates payments, commerce and financial services, as well as crypto capabilities. After outperforming earlier in the year, the performance of PayPal shares weakened in the third quarter with the company facing potentially higher transaction expenses and credit losses. The higher transaction expenses are driven by a shift by consumers to the higher cost travel and entertainment categories which skew toward less profitable credit transactions.”
