2. Polkadot
Polkadot is an open-source protocol that incorporates sharding and connects multiple specialized blockchains to establish a secure network, promoting interoperability of various asset and data types across different blockchains. Its ultimate goal is to lay a foundation for a decentralized Web3. Polkadot’s native token, DOT, serves three essential functions, which are staking for security and operations, supporting network governance, and bonding tokens to link parachains.
PayPal Holdings, Inc. (NASDAQ:PYPL) is a company that provides digital payment services through several brands, including PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy. In August 2022, PayPal Holdings, Inc. (NASDAQ:PYPL) declared that its customers can send cryptocurrency from their PayPal accounts to other external crypto addresses without any fees, making it one of the premier cryptocurrency stocks to invest in. On February 13, BMO Capital analyst James Fotheringham assigned an Outperform rating to PayPal Holdings, Inc. (NASDAQ:PYPL) but lowered the firm’s price target on the shares to $108 from $117.
According to Insider Monkey’s fourth quarter database, 115 hedge funds were long PayPal Holdings, Inc. (NASDAQ:PYPL), compared to 126 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is the biggest stakeholder of the company, with 6.75 million shares worth $481 million.
RiverPark Large Growth Fund made the following comment about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q4 2022 investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL): 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 better-than-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 e-commerce driven digital payments, as well as consumer-to-consumer payment trends through its Venmo peer-to-peer (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.”
