ClearBridge Investments gave its stance on PayPal Holdings Inc (NASDAQ: PYPL) in its investment letter. PayPal, which is currently led by Dan Schulman, its CEO, has a market capitalization of $141.9 billion. The company’s returns for the last 12 months have gone down by 51.87%, while its return since the beginning of the year has declined by 35.38%. In its last trading session, PayPal stock closed at $121.86 per share.
ClearBridge states that PayPal has increased exposure to fintech, e-commerce, and digital payments. Moreover, the company saw tremendous growth during the COVID-19. This growth was enhanced by the company’s decision to introduce Buy Now, Pay Later services and venture into cryptocurrency.
Despite the company’s success, its shares have declined. The decline is due to disrupted patterns in consumer spending and competition. This change has led to the company trading at its pre-pandemic levels. However, its operations remain intact, and the company could grow more in the long term.
PayPal releases cashback credit card
Meanwhile, the company has released a Synchrony-issued cashback credit card that increases the amount of cashback for customers using the platform to pay for items. Fortunately, the card doesn’t come with category restrictions or annual fees. Customers could also add it to their PayPal wallet to ensure a secure, fast, easy checkout.
This card comes at a time when customer shopping habits are changing. The pandemic has mainly caused these changes. Over 60% of U.S customers now make purchases in-store and online. They also buy things online in multiple categories.
The company’s shares are declining
These changes don’t mean the company has had an easy year. As the pandemic restrictions ease, online purchases are also going down. For this reason, many investors have pulled out of the company due to a decline in shares.
However, experts believe that this will not affect the company’s long-term growth. More businesses seem to be incorporating digital payment services like Venmo, which PayPal owns, into their services. While online purchases have gone down, they are still high and could increase.
Experts point out that the company will have to compete with other services, including Amazing Pay, Google Pay, and Apple Pay, which are gaining popularity.
