On Thursday, PayPal Inc. (NASDAQ:PYPL) shares advanced more than 4% after Mad Money host Jim Cramer told CNBC investors should consider buying the stock. Cramer recommended PYPL alongside SoFi Technologies Inc. (NASDAQ:SOFI) saying they provide access to neo banking.
He said investors could turn to “nouveau banks†if Wall Street bank earnings fall short of high expectations.
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Cramer told CNBC:
If the rest of them go like JPMorgan … then it’s possible we could have still [have] one more exodus from the straight financials and one more love affair with the Fintechs.
PayPal shares are now up 15% this year and more than 315 over the last 12 months following Thursday’s spike.
PayPal’s growth outlook
From an investment perspective, PayPal shares trade at a steep P/E ratio of 65.21, making the stock less attractive to value investors. However, the company offers exciting growth prospects to investors looking for long-term investments.
Analysts expect the online payments giant’s earnings per share to grow by 71% this year before rising at an average annual rate of more than 24% over the next five years. Therefore, growth investors could find the stock exciting ahead of its compelling growth story.
The rebound seems poised to continue
Technically, PayPal shares appear to have recently bounced back to avoid sleeping into the oversold territory of the 14-day RSI. However, the stock still trades several levels below the 100-day moving average and has room left to run before reaching overbought conditions.
Therefore, investors could target extended gains at about $278.28, or higher at $292.39. On the other hand, if the stock pulls back prematurely, it could find support at $255.09, or lower at $240.91.
It could be time to buy PayPal shares
In summary, although the PYPL stock price spiked more than 4% on Thursday, the shares still trade more than 13% off their July highs, leaving room for the rebound to continue.
Moreover, whilst the stock price seems steeply valued at the current P/E ratio, the company offers exciting growth prospects, making it perfect for investors willing to overlook short-term turbulence.
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