Paypal Holdings Inc (NASDAQ:PYPL): Beginning of Market Dominance

Paypal Holdings Inc (NASDAQ:PYPL) is getting investors attention after the stock touched fresh highs amid a new partnership with Apple. The company has a new rival in the form of Apple Pay, but the it still managed to enter a partnership with Apple after which customers will be able to use their PayPal accounts to purchase items on iTunes. The partnership is part of PayPal strategy to expand its footprint by collaborating with other companies.

Paypal Holdings Inc (NASDAQ:PYPL) also recently entered into a partnership with LendUp, an online lender that provides “quality” credit to financially unprivileged people and those with bad credit ratings.

The stock is up over 43% since the start of the year.

Paypal Holdings Inc (NASDAQ:PYPL) number of active users is surging quite rapidly. In the first quarter, PayPal saw a jump of 10.3% in monthly active users on year-over-year basis. The total number of transactions also increased by 22.5% in the period.

PayPal is also the owner of Venmo, one of the most famous Peer-to-Peer payments splitting mobile apps. Venmo is extremely famous among millennials. Venmo could be used within various messaging apps, including iMessage. In the first quarter, Venmo processed $6.8 billion in total payments, a 100% growth on year-over-year basis. Venmo is slated to grow more as the company expands to small businesses. Last year, Venmo allowed merchants to pay through the app. Analysts think that Venmo has the potential to replace credit cards in the future. Over 203 million people use Venmo as of the end of the first quarter.

Earlier this year, Paypal Holdings Inc (NASDAQ:PYPL) acquired TIO Networks for $233 million. With this acquisition, PayPal has tapped into the gigantic market of lower middle class Americans. TIO Networks is a company that allows customers to pay their utility bills through kiosks. TIO has around 14 million customers and 65,000 retail locations, as of the end of 2016.

Analysts think the time is ripe for Paypal Holdings Inc (NASDAQ:PYPL) to acquire the California-based payments merchant Square. Square has a disruptive technology, and the company is looking forward to expand outside the US.

Jim Cramer recently said that the key to Paypal Holdings Inc (NASDAQ:PYPL) success is its CEO Bill Ready’s strategy of partnering with companies instead of going to war with them. Cramer thinks that PayPal is a “brilliant” stock that is growing.

On Monday, Bernstein analyst Lisa Ellis increased her rating for the PayPal stock to “Outperform” from “Market Perform”. The analyst has a $61 price target on the stock. Lisa thinks that Paypal Holdings Inc (NASDAQ:PYPL) is at the “beginning, not the end” of multi-year outperformance supported by high-teens earnings appreciation.