If you’re around Richmond in London and see a person with a gentle smile of satisfaction on their face as they stroll down for a post-work pint at the White Cross pub of an evening by the River Thames then it could well be that you’ve spotted a PayPal employee. And assuming they have decent stock options as part of their contract, they have every right to be cheerful: since the start of the year PayPal shares have appreciated by 75%.
By any measure, for any company, that’s a staggering increase. But it’s worth putting it into perspective. Not just in terms of what that says about the company after the eBay split but in comparison to other major financial organisations.
So, for context that puts the stock market valuation of PayPal, the market capitalisation, over that for American Express.
PayPal’s market capitalisation now hovers around $83 billion. That’s comparing very favourably with the $47 billion valuation it had when it spun off from eBay Inc. back in a July 2015.
With a PayPal price of $83bn, PayPal really is playing in the big league with serious financial firms. PayPal is $6 billion away from passing Morgan Stanley and within $10 billion of Goldman Sachs company valuation. PayPal is hardly still the upstart crow.
And the big boys know PayPal is yapping at their heels. Morgan Stanley upgraded PayPal’s shares saying that PayPal “is among the few large companies that can deliver high-teens revenue growth with significant upside opportunities.”
And there is no reason why PayPal shares shouldn’t continue to climb. They are doing well as PayPal and also have a decent portfolio of sub-brands that prosper in their own right. Venmo is a hugely popular payment firm especially popular with millennials in the USA. Braintree powers payments for a variety of firms an services and is both immensely powerful and clever.
The question is: what next for PayPal?