In a bid to bolster presence in the payment industry, PayPal Holdings, Inc.PYPL has acquired San Mateo-based startup, Jetlore. Notably, the startup provides a prediction platform by leveraging the power of artificial intelligence (AI).
Jetlore's platform provides insights about customer behavior to retailers by analyzing the data related to products and customer's buying habits. The startup has two AI driven products - Predictive Layouts and Predictive Ranking. Both these products aid the retailers in exhibiting products according to their customer's taste and preferences, enriching the experience.
The acquisition will innovate and expand the company's product portfolio with the help of AI technology. This will further improve customer base which will help it to gain momentum in the market.
Coming to price performance, shares of PayPal have returned 58.4% over a year, outperforming the industry 's rally of 27.9%.
Merchant Base to Improve
With the growing demand for AI powered business solutions globally, the company's latest move bodes for its market position.
Per the report from McKinsey&Co., AI technology has potential to increase the value of marketing and sales strategies by $5 trillion in retail sector.
Jetlore will strengthen PayPal Marketing Solutions with its suite of marketing analytics and A/B testing tools. The company is focused at providing efficiency to the business of retailers utilizing PayPal's payment processing, PayPal Credit and other solutions.
The integration of both the company's products will enable the retailers to create personalized customer experiences. This will enhance the experience of merchants on PayPal's platform. Further, the company's relationship with merchants as a payment processor will improve.
We believe the latest move will give a boost to the merchant base of PayPal, consequently, driving the top line.
Additionally, Jetlore's management team which includes expertise from retail AI is also part of the deal. The team is expected to help PayPal in innovation and creation of AI business tools for the merchants.
PayPal Holdings, Inc. Revenue (TTM)
Strategic Acquisitions - Key Catalyst
Over the past few years, acquisitions have played a significant role in shaping the company's growth trajectory. The latest acquisition will add AI capabilities to PayPal's product portfolio.
Recently, the company has also acquired iZettle, a developer of small, wireless chip readers and also offers services like providing capital, invoicing and inventory management. The deal is in sync with the company's focus on global expansion. Further, iZettle has a large number of merchants on its platform which will strengthen PayPal's merchant base.
We believe PayPal's increasing buyouts will continue to add strength to its product portfolio which will aid it in serving customers better.
Zacks Rank & Stocks to Consider
Currently, PayPal carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader technology sector are Twitter TWTR , Upland Software UPLD and Attunity ATTU . While Twitter and Upland Software sport a Zacks Rank #1 (Strong Buy), Attunity carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Long-term earnings per share growth rate for Twitter, Upland Software and Attunity is projected at 23.1%, 20% and 20%, respectively.
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