Vermilion Short Shots: Technically Vulnerable Stocks

Short Shots is a collection of technically vulnerable charts culled from the Negative Inflecting and Toppy columns within our Weekly Compass report or from various technical screening processes. The charts contained in this report have developed concerning technical patterns that suggest further price deterioration is likely. For these reasons Short Shots can also be a great source of ideas for investors interested in short-selling candidates.

In-Payments: X Money and Musk: risks to PayPal (Venmo), Cash App and p...

X announced last week it was partnering with Visa to develop a real-time payment system in the US. Through Visa Direct, X Money Account will support an in-platform digital wallet and peer-to-peer payments connected to users’ debit cards, with an option to transfer funds to a bank account.

PayPal (BUY, TP: $100, +25%) - Solid beat at Q4; branded concerns appe...

PayPal reported another solid quarter, coming in ahead of expectations: 4% at transaction margin $ and 6% at non-GAAP EPS. Guidance for FY 25 suggests a small uplift to TM$ and EPS for the street though the bears seem (still) very focused on branded TPV growth.

Dropping Coverage

Moody's Ratings withdraws Cielo S.A.'s rating for business reasons

Moody's Ratings (Moody's) has withdrawn the Ba2 corporate family rating (CFR) of Cielo S.A. (Cielo). The outlook prior to the withdrawn was stable. RATINGS RATIONALE We have decided to withdraw the rating(s) for our own business reasons. Please refer to Moody's Ratings' Withdrawal of Credit Rati...

In-Payments: a new bi-weekly blog! Paze to be Fastlane? Click to Pay ...

To kick off 2025 we’re launching “In-Payments”, a bi-weekly blog which will leverage off recent news flow for a quick dive into what we see as key themes to be tracking across the Payments and broader Fintech space.

Cielo S.A. - September 2024 (LTM): Peer Snapshot

Compares key performance metrics against industry peers.

PYPL US (BUY, TP: $100, +12%) SQ US (Neutral, TP $70 - UR) CFPB overs...

The Consumer Financial Protection Bureau (CFPB) issued a finalized version of a rule at the end of last week, saying it will soon supervise non-bank firms, including PayPal and Block, that offer financial services. With an inbound Trump, does this still matter?

PYPL US (BUY, TP: $100, +25%) PayPal - Pillar Two tax / EPS risk for F...

We spoke to PayPal today for a broader Q3 wrap but specifically also to focus on Pillar Two, given this tax angle is the current topic du jour (and following Mastercard’s guide last week) and given market whispers that 10% of PayPal EPS could be at risk from FY 25. Such extreme estimates seem a stretch.

Money 20/20 USA - Key takeaways

While still recovering from the whirlwind of information we’re taking an initial crack at summarizing some of the key takeaways from attending the annual Money 20/20 USA jamboree in Las Vegas last week. While the subject of many discussions was quite predictable—did anybody mention AI?— insight came from conversations around ROI considerations for AI, Open banking/finance use cases and compliance, Real-time payments and the ever-present issue of Fraud.

PYPL US (BUY, TP: $100, +25%) Healthy Q3 beat; sneak preview for FY 25...

PayPal reported solid Q3s, coming in ahead of expectations: 4% at transaction margin $ and 11% at non-GAAP EPS. FY guidance for 2024 was lifted, and consensus will move up, although less so for Q4 once higher higher investment costs are factored in.

PYPL US (BUY, TP: $100, +28%) PayPal - Everywhere CAC/LTV modeling, A...

We are pushing up our mid-term TM$ estimates on PayPal. Whilst remaining very constructive on Fastlane as a key product driver (see Faster Lane, bigger destination, Aug 20th), we are incorporating stronger debit adoption into estimates, modelling in more detail the direct and flywheel effects of PayPal Everywhere (and indirectly Venmo) and looking in more detail at how CAC/LTV can make sense (push back has been on the 5% cash back incentive and the merit/effectiveness of reward schemes).

Vital Signs: Actionable charts

In this product we rank the most positive and negative domestic stocks, filter the symbols by market-cap and trading volume, and then divide the companies into sectors and groups. We then manually look through charts leadership/changes, bottoms-up/top-down ideas, short-term patterns that may have long-term significance, etc. We believe you will find this product valuable as significant price and relative moves begin in the daily charts.

PYPL US (BUY, TP: $85, +24%) ADYEN (BUY, TP: EUR1,700) SQ US (Neutral,...

We continue our series of Deep dives into Payments (see previous: Unified Commerce, and Rise of the Merchants) with a look at Real Time Payment (RTP) developments. Adoption has been rapid on a global basis, notably at the consumer level in markets like Brazil, though is a significant laggard in the US. Momentum here is, however, slowly building through FedNow (launched only in 2023) with banks/FIs stalling, but with consumer demand we think high and with a Visa/Mastercard interchange settlement ...

PYPL US (BUY, TP: $85, +25%) PayPal Everywhere? Well, almost there..

PayPal at the end of last week presented “PayPal Everywhere”, with “new rich rewards and in-store access” which, according to the release, will “...transform PayPal into a single solution for every type of customer everywhere they shop”. A quick read of the headline might suggest that PayPal is (finally) becoming available for in-store payments. Perhaps even somehow already taking advantage of Apple’s recently announced opening up of access to the NFC chip (and “Secure Element”) for 3rd parties,...

Cielo S.A.: Update following affirmation

Our credit view of this issuer reflects its adequate credit metrics, offset by its increased competition in the cards and electronic payment industry

Cielo S.A. - June 2024 (LTM): Peer Snapshot

Compares key performance metrics against industry peers.

Moody's Ratings affirms Cielo's Ba2 ratings; outlook stable

Moody's Ratings (Moody's) has affirmed Cielo S.A. (Cielo)'s Ba2 Corporate Family Ratings. The outlook is stable. The affirmation follows the approval of a tender offer by controlling shareholders, Banco do Brasil S.A. (Banco do Brasil, Ba2 positive) and Banco Bradesco S.A. (Banco Bradesco, Ba2 pos...

PYPL (BUY, TP: $85 ($80), +25%) PayPal - Faster lane, bigger destinat...

With Fastlane a key driver of our positive view on the stock we update our thinking for latest commentary and aspirations here following Q2s (see note here) noting that being processor agnostic changes the way we’re looking at things (not bad, potentially better). We also run through Apple’s key news regarding access to its NFC chip (and “Secure Element”) for 3rd parties in multiple geographies from August 14th – the start of a journey which should allow PayPal to plug the hole in-store/anywhere...

PYPL US (Buy, TP: $80, +25%) PayPal Q2 24 - Beat and raise; Fastlane ...

PayPal reported very strong Q2s, with Transaction margin $ 7% ahead of expectations, and growing 8% y/y, in turn driving a 21% non-GAAP EPS beat. All key guidance indicators for FY 24 are lifted. TM % growth is supported by a return to growth in Unbranded, a solid performance from Branded and from Venmo and ~3pp of growth from interest income.