On Thursday, PayPal (NASDAQ:PYPL) retained its Outperform rating and $78.00 price target from Keefe, Bruyette & Woods. The endorsement comes as eBay (NASDAQ:EBAY) revealed plans to incorporate Venmo as a payment method on its platform. The new checkout option will be available on eBay.com and its mobile application, offering U.S. buyers the ability to use Venmo for purchases within the next week.
The integration of Venmo is a significant enhancement for eBay, as it broadens the payment options for customers, potentially improving the ease of transactions and user experience. Venmo, a popular digital wallet owned by PayPal, has a strong user base that could now engage more actively in e-commerce on eBay's marketplace.
This development is expected to be implemented seamlessly, giving buyers the choice to use Venmo alongside other payment methods. The announcement did not specify the exact date when Venmo will go live on eBay, but the timeline suggests a swift rollout, aiming to make the service available to users in the very near future.
The collaboration between PayPal and eBay through Venmo represents a strategic move to enhance payment flexibility and could contribute to PayPal's performance in the digital payments market. As the Venmo option becomes operational for eBay customers, it marks another step in the ongoing integration of financial technology services into the broader e-commerce ecosystem.
In other recent news, eBay has been the subject of several notable developments. Citi has upgraded eBay's stock to a Buy rating from a Neutral stance, citing margin expansion and anticipated share buybacks. The firm has set a price target of $64.00 for the online marketplace, indicating a positive outlook for eBay's growth and profitability. Truist Securities also raised its price target for eBay, maintaining a Hold rating on the stock.
eBay has finalized the sale of a significant stake in Adevinta ASA for approximately $2.4 billion, a major transaction in the company's recent developments. The proceeds from this sale are expected to be channeled towards general corporate activities, including share repurchases, debt repayment, capital investments, and potential acquisitions.
In collaboration with Japan's Rakuten Group, eBay is assessing the U.S. market's interest in pre-owned Japanese fashion items. This venture involves a select group of vendors from Rakuten's second-hand goods division, Rakuma. Additionally, eBay is set to reduce its workforce by around 9%, as part of a wider trend of workforce reductions across North American firms.
InvestingPro Insights
As eBay (NASDAQ:EBAY) expands its payment options with the integration of Venmo, a PayPal service, the company's financial health and strategic moves become increasingly relevant to investors. According to InvestingPro data, eBay boasts a sturdy market cap of $27.17 billion and an attractive P/E ratio of 10.63, suggesting a potentially undervalued stock in comparison to its earnings. Notably, eBay's gross profit margins stand at an impressive 72.11%, underscoring the company's ability to retain a significant portion of its revenue as profit.
InvestingPro Tips highlight eBay's commitment to shareholder value, as evidenced by its consistent dividend increases over the past five years and a dividend yield of 2.03%. Moreover, the company's stock has experienced a large price uptick over the last six months, with a total return of 28.09%, which aligns with the positive sentiment around its financial performance and strategic initiatives like the Venmo integration.
For investors seeking a deeper dive into eBay's financials and strategic outlook, InvestingPro offers additional tips that could provide a more comprehensive understanding of the company's position and prospects. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and explore the full range of insights available on InvestingPro, including more on eBay's moderate level of debt and its trading activity near the 52-week high.
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