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Jim Cramer: Hold PayPal and Square Stock

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What do you think about PayPal and Square?

"First, hardly a day goes by when some analyst doesn't raise his or her price targets for a handful of stocks. I will mention two that I like very much so no one thinks I am bashing anyone: Square (SQ) and PayPal (PYPL). Both of these fine companies are truly coming to the fore here, Square because of its creative ways it helps small and medium-sized businesses centered around the point of sale technology and PayPal because of its incredible digital and mobile payments platform. PayPal's stock is up 57% this year and is now valued at $200 billion. Square's rallied 66% and is worth $45 billion," wrote Cramer. 

"Now if you called on the Lightning Round of Mad Money and asked me about what I thought of these companies I would have to say they are best of breed of the new world. But here's what I would not have time to say: I worry that they just go up and up for the same reasons: price-tag boost upon price-tag boost," he continued. "I don't have even an inkling that they are going up because of earnings or even sales. It would be terrific to see that real take-off but what's been the reality here? When Square reported in May it missed the gross payment volume estimate, had a slight beat in revenues, and missed the earnings estimate by a mile, 2 cents versus 10 cents. It also pulled its guidance. For that, the stock's been rewarded with a dramatic move upward, $63 to $104."

Read his Real Money column here.

Jim Cramer said that he would advise investors to hold Square and PayPal for now.

You can follow Jim Cramer and Katherine Ross on Twitter at @JimCramer and @byKatherineRoss. Read more from Katherine Ross here.

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