Why PayPal's stock cruised to its best day since January

By Emily Bary

CEO recently sounded a bullish tone, and investors are appreciating opportunity in guest checkout

PayPal Holdings Inc. shares haven't had an easy go of things in recent years, but the stock saw momentum in Thursday's session.

The drivers are twofold, according to Mizuho analyst Dan Dolev. For one, Chief Executive Alex Chriss sounded bullish at an investor conference late Wednesday. Plus, Dolev thinks investors are coming around to the opportunity presented by PayPal's (PYPL) new Fastlane product, which aims to speed up guest checkout.

PayPal's stock rose 5.5% in Thursday trading to record its largest single-day percentage increase since Jan. 19, when it rose 6%. The stock was also the second-biggest gainer in the S&P 500 SPX on the day, behind Illumina Inc.'s stock (ILMN), which advanced 7.4%.

"We're sitting on one of the largest two-sided ecosystems in the world and have just a tremendous opportunity to leverage data and leverage this global ecosystem to delight customers, so a lasting innovation," Chriss said at a Bank of America conference on Wednesday.

Don't miss: PayPal CEO sees 'huge monetization opportunity' after revamp

He added that PayPal was "still the No. 1 player in branded checkout," albeit with room to improve on some things. "The place we're falling down right now the most is through mobile," he said, but added that PayPal sees a chance to fix that through new product innovations.

Dolev upgraded PayPal shares to buy from neutral last week, based largely on optimism around Fastlane. He said investors are beginning to see more opportunity there as well.

See more: PayPal's stock packs nearly 50% upside, a renewed bull says. Here's why.

"People are really waking up to that Fastlane opportunity," he told MarketWatch. "We've been getting a lot of traction from investors following that analysis."

PayPal shares have missed out on the market's rally, rising only 3.7% over the past year while the S&P 500 SPX has gained about 25%. They're down 15% over a two-year span, while the S&P 500 is up 37% in that time.

-Emily Bary

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06-06-24 1626ET

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