Did PayPal's (PYPL) Launch of Ads Manager Just Shift Its Payment-to-Commerce Investment Narrative?

• On October 7, PayPal introduced PayPal Ads Manager, a new digital advertising platform that enables the millions of small businesses in its network to monetize their store traffic and manage ad inventory through their existing PayPal Merchant Portal.
• This launch allows PayPal to open up retail media network opportunities, traditionally available only to large enterprises, to small businesses, potentially reshaping the digital advertising landscape for merchants and brands alike.
• We'll explore how PayPal's expansion into digital advertising with Ads Manager could influence its broader transition from payments to commerce.

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PayPal Holdings Investment Narrative Recap

To own PayPal shares today, you need to believe in the company’s ongoing transformation from a pure-play payments business into a broader commerce platform with data-driven services for merchants. The launch of PayPal Ads Manager is an incremental step within this strategy, broadening potential near-term revenue streams; however, its immediate effect on the company’s core transaction growth, still the most important short-term catalyst, remains limited. The largest risk in focus continues to be competition in key markets like the UK, which could restrain PayPal’s ability to maintain revenue growth regardless of product launches.

Among recent announcements, the partnership with Google, focusing on digital commerce solutions, aligns closely with PayPal’s push into integrated platforms and expanded merchant services. This context matters to the Ads Manager introduction, providing potential cross-platform advantages as PayPal looks to scale new offerings and drive greater merchant engagement. Yet, even as product breadth widens, the ultimate outcome will depend on ...

Read the full narrative on PayPal Holdings (it's free!)

PayPal Holdings' outlook anticipates $38.1 billion in revenue and $5.4 billion in earnings by 2028. This is based on an expected 5.6% annual revenue growth rate and a $0.7 billion increase in earnings from the current $4.7 billion.

Uncover how PayPal Holdings' forecasts yield a $82.52 fair value, a 22% upside to its current price.

Exploring Other Perspectives

Sixty-six individual fair value estimates from the Simply Wall St Community span from US$74.16 to US$189.96 per share. As PayPal expands beyond payments, competition in core markets remains critical to watch for long-run performance. Review alternative opinions now.

Explore 66 other fair value estimates on PayPal Holdings - why the stock might be worth over 2x more than the current price!

Build Your Own PayPal Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your PayPal Holdings research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free PayPal Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate PayPal Holdings' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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