Amazon (NSDQ: AMZN) Through its Amazon Pay service, Amazon's 300 million customers can pay for their purchases using information stored in their account profiles. Read This Story: Our Amazon Stock Prediction In 2019 (Buy or Sell?) Also, merchants selling goods on Amazon can receive instant payments without going through a third party such as PayPal. Alphabet (NSDQ: GOOGL) Google Pay (formerly "Google Wallet") is a virtual clone of PayPal, enabling users to access all of their bank accounts and credit cards in a single app. Read This Story: Our Alphabet Stock Prediction In 2019 (Buy or Sell?) In addition, airline boarding passes and movie tickets that have been purchased with Google Pay can be stored on the same device. Apple (NSDQ: AAPL) If you ever stood behind someone at Starbucks and seen them pay for their purchase by waving their phone over a sensor, chances are they were using Apple Pay for that transaction. Read This Story: Our Apple Stock Prediction In 2019 (Buy or Sell?) And since Apple's share of the U.S. smartphone market is 45% compared to 33% for Samsung Electronics (OTC: SSNLF), it stands to reason that Apple Pay will enjoy a similar user advantage over Google Pay. Will PayPal Stock Go Up in 2019 (Should you Buy?) Mobile payments are predicted to increase by a compound annual growth rate (CAGR) of 30% over the next four years, from $87 billion in 2019 to $194 billion in 2022. If PayPal can hold on to its current market share, its revenue should increase by a similar amount. However, PayPal's guidance for 2019 indicates that the company expects its total sales to grow by 17% this year. In terms of earnings, on a GAAP basis PayPal is expecting earnings per share (EPS) of no more than $1.93 in 2019 compared to $1.71 last year. Will PayPal Stock Go Down in 2019 (Should you Sell?) The walls are starting to move in on PayPal. Last year, eBay began transitioning to Adyen as its primary payment processor. By 2021, PayPal will be completely phased out of all eBay transactions. At the same time, Amazon, Google, and Apple are ramping up their proprietary payment options. At a share price of $95, PayPal stock is valued at 27 times forward earnings. That's pricey for a company that grew its full-year EPS at a 16% rate in 2018. During the fourth quarter, eBay revenue was 10% of PayPal's total processing volume, which will soon dwindle to nothing. If that income can't be replaced, a solid argument can be made that PayPal stock has peaked and has nowhere to go but down in 2019. Overall PayPal Stock Forecast and Prediction for 2019 We believe PayPal could merge with a major bank within the next year. Just as JPMorgan Chase (NYSE: JPM) bought WePay, we think PayPal could partner with Citigroup (NYSE: C), Bank of America (NYSE: BAC), or even beleaguered Wells Fargo (NYSE: WFC). Under that scenario, PayPal would gain access to enough capital to compete with Amazon, Google, and Apple. It would also open up several new payment processing channels to offset the loss of eBay. If that happens, the impact on PayPal stock will most likely be negative in the short run. Bank stocks trade at much lower multiples than tech stocks. However, in the long run, such a merger could be very positive for owners of PayPal stock. For that reason, we suggest holding off on buying PayPal stock for now. But if PYPL takes a dive after such a deal is announced, that may be the time to load up on PayPal stock. I've just explained that PayPal could be a growth opportunity in 2019, if circumstances pan out. But how would you like to make money in up or down markets, with greater certainty? My colleague Amber Hestla can help. Amber is an ex-military intelligence officer who has spent her career pinpointing the vital but elusive information that most people overlook. She has devised a money-making method that investors of all types should consider. Amber Hestla's strategy is time-tested, with the potential to triple your monthly income. Want to learn how she does it? Click here for a free presentation. |
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