PayPal’s Braintree Likely Worth $15bn-$20bn – Bernstein

By Sam Boughedda

In a note to clients Wednesday, Bernstein analysts told investors the firm believes PayPal’s (NASDAQ:) Braintree is likely worth $15 billion to $20 billion.

“PayPal’s TPV is now roughly equally split between the button, Braintree & P2P. The core button is the profit engine of the company, P2P is empty calories (loss-leader for user acquisition and engagement) and Braintree sits somewhere in between,” they wrote. Bernstein has a Market Perform rating and $100 price target on Paypal.

The analysts described Braintree as PayPal’s “growth engine” in 2022, explaining that the rest of PayPal’s business has been plagued by tough comps, FX, eBay (NASDAQ:), and intensifying competition.

They explained that Braintree’s size and growth has drawn comparisons with peers such as Adyen (OTC:), which is valued at $40 billion, and Stripe.

“We est. Braintree is likely worth $15-20B — lower vs. Adyen and Stripe on account of its smaller size, likely more limited capabilities & geo reach, and potentially lower margins (vs. Adyen). As such, we see limited value in SOTP for PayPal (valued at ~$90B ex-cash on B/S), especially since there are deep synergies between the core PayPal platform and Braintree, more of which will likely be unlocked as they are likely finally on a single platform now,” the analyst concluded.

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