5 Fintech Stocks Getting Hammered Amid Economic Weakness

1. PayPal Holdings, Inc. (NASDAQ:PYPL)

YTD Share Price Decline as of July 28: 55.67%

Number of Hedge Fund Holders: 100

PayPal Holdings, Inc. (NASDAQ:PYPL) is a California-based company operating a technology platform that offers payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy brands. The stock has dropped about 56% year to date as of July 28. 

On July 27, after Elliott Management took a position in PayPal Holdings, Inc. (NASDAQ:PYPL), Mizuho analyst Dan Dolev told investors his thoughts on how to optimize the company’s potential. While there have been mishaps, PayPal Holdings, Inc. (NASDAQ:PYPL)’s primary checkout business and Braintree “are much stronger than many perceive”, the analyst said. However, PayPal Holdings, Inc. (NASDAQ:PYPL) spends excessively on research and development, noted the analyst, who sees potential for more than 1,000 basis points of GAAP margin expansion. He kept a Buy rating on PayPal Holdings, Inc. (NASDAQ:PYPL) with a $120 price target.

According to Insider Monkey’s data, 100 hedge funds were bullish on PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of March 2022, down from 110 funds in the last quarter. Ken Fisher’s Fisher Asset Management held the leading stake in the company, with 16.7 million shares worth about $2 billion. 

Here is what Wedgewood Partners has to say about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q2 2022 investor letter:

“PayPal Holdings detracted from performance despite the Company generating healthy growth. Revenue grew +8%, but closer to +15% when adjusted for the well-telegraphed roll-off of its eBay relationship. As the Company laps the headwinds of eBay and difficult year ago comparisons, we expect PayPal should drive long-term growth in the mid-teens. Much of this will be driven by further penetration into the Company’s nearly 450 million active users. PayPal’s user base has grown by +50% since the onset of the pandemic so it makes sense for management to focus on driving higher transactions per account and better monetize this historical windfall of users. In our opinion, the shares have discounted away all of PayPal’s pandemic user and revenue gains, so we added to positions during the quarter.”

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