Pay Pal (PYPL) – Get the PayPal Holdings Inc report shares rose on Monday, after a report that the financial services company plans to provide online stock trading to its clients.
The move would come amid growing efforts by banking and payments companies – ranging from Square SQ to Goldman Sachs GS – to bolster their personal finance offerings and capitalize on a surge in retail investment triggered in part by Robinhood. (HOOD) – Get the Robinhood report and its free trading offers.
San José-based PayPal, which started out as a payments company, is now also looking to establish itself as a one-stop-shop for personal finance.
PayPal recently hired an experienced broker, Rich Hagen, for the project, CNBC reported, citing knowledgeable sources. Hagen was previously President of Ally Invest. In his new role, he’s managing director of Invest at PayPal, according to his LinkedIn page.
The company could start its own stock brokerage, cooperate with an existing business, or buy one. He has already spoken to potential industry partners, one of the sources said. CNBC reported that PayPal is unlikely to launch a stock trading platform this year
PayPal recently traded at $ 287.15, up 3%. The stock has only risen 5% in the past six months amid concerns over valuation and industry competition.
Morningstar analyst Brett Horn increased his estimate of PayPal’s fair value to $ 147 from $ 139 last week.
“In recent years, PayPal’s growth has continued to be driven by the ongoing transition to electronic payments and the rise of e-commerce,” Horn wrote in a comment.
“In the short term, few payment companies are as well positioned as PayPal. Longer term, however, the picture is less clear, and we see a mix of competitive opportunities and threats that create a fairly wide range of outcomes. ”