- Goldman Sachs analyst Michael Ng has initiated coverage on fintech firms PayPal Holdings Inc (NASDAQ:PYPL) and Block Inc (NYSE:SQ) with Buy ratings.
- Ng initiated coverage of PayPal with a $144 price target (19% upside).
- Ng also initiated Block with a $173 price target (20% upside).
- Ng saw PayPal's return to profit growth of over 20% beyond this year, driven by product initiatives and secular tailwinds from the digitization of payments, e-commerce growth, and international expansion.
- PayPal reported quarterly earnings of $1.11 per share, missing the consensus of $1.12. PayPal also reported Q4 sales of $6.90 billion, beating the $6.86 billion consensus.
- Ng thinks Block benefits from Cash App's growing monetization from new product features while enjoying ongoing user growth from the network effects of people-to-people payments and the acquisition of Buy Now, Pay Later platform Afterpay Ltd (OTC:AFTPY).
- Block reported Q4 revenue of $4.08 billion, up 29% Y/Y, beating the consensus of $4.03 billion. EPS of $0.27 beat the consensus of $0.22.
- Price Action: PYPL shares traded higher by 0.21% at $122.43 on the last check Wednesday.
