BofA Securities analyst Jason Kupferberg maintained a Neutral rating on PayPal Holdings, Inc.
The analyst writes that several announcements in the payments industry highlight the company's ongoing competitive challenges, which resulted in shares retracting much of last week's gains.
This week, Apple Inc.
The analyst expects "Tap to Cash" feature to pose more competition for Venmo than Cash App, considering end-user demographics.
Moreover, Apple announced plans to integrate Affirm Holdings, Inc.'s
Apart from this, Mastercard Incorporated
The analyst says that although this initiative is long-term, it underscores the ongoing competition for PayPal's core checkout button and its new Fastlane service aimed at guest checkout.
Overall, the analyst says that PayPal's new leadership is making sensible strategic moves, with the second quarter tracking ahead of the transaction profit, operating expenses, and EPS plan.
However, PYPL operates in a highly dynamic and complex competitive environment, which may limit the extent of top-line acceleration necessary for significant multiple expansion, writes the analyst.
Investors can gain exposure to the stock via Global X FinTech ETF
Price Action: PYPL shares are down 1.99% at $63.48 at the last check Wednesday.