Cramer thinks investors should buy this fintech stock on the dip

Published Thu, Jul 29 202112:38 PM EDTUpdated Thu, Jul 29 20215:50 PM EDT

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

CNBC's Jim Cramer said Thursday that investors are getting an attractive opportunity to buy shares of a dominant fintech player on a down day. The company is PayPal , with a stock market value of more than $336 billion. "This stock is a buy, and you just have to overlook what they had to say about eBay and recognize that growth is apace. It's fantastic. And by the way, they're ready to do anything you want [with] crypto," said the "Mad Money" host, whose charitable trust owns PayPal shares. Shares of the digital payments company fell 6.23% Thursday to close at $283.17, one day after the company's second-quarter revenue came in light and it issued a third-quarter earnings and revenue outlook that also fell short of expectations. PayPal late Wednesday posted second-quarter revenue of $6.24 billion. It did, however, beat estimates with an adjusted per-share profit of $1.15. For the current third quarter, the company said it sees adjusted earnings of $1.07 per share on revenue of $6.15 billion to $6.25 billion. Despite Thursday's decline, the stock, which hit an all-time high of $310.16 on Monday, was still up almost 21% in 2021 and more than double that over the past 12 months. EBay challenges On PayPal's earnings call, considerable attention was given to challenges related to eBay , which is shifting away from PayPal to a new payment processing system. EBay used to own PayPal, before spinning it off into a separate company in 2015 . The two companies at the time agreed PayPal would remain eBay's payment processor for five years. That agreement expired last summer. The eBay transition was more impactful in the second quarter than the first, PayPal Chief Financial Officer John Rainey said on the call, according to a FactSet transcript. He added it will persist into the third quarter and it's one reason for the weaker-than-anticipated guidance. While no longer processing eBay's payments, users can still use PayPal to buy things on the marketplace. Cramer said he wanted to "look away" from the eBay situation and instead focus areas where PayPal's business is expanding. Crypto growth opportunities "There's been remarkable growth here. Venmo is incredible," Cramer said, referring to PayPal's peer-to-peer payments app, which competes with the likes of Square' s Cash App. Venmo processed around $58 billion in the quarter, up 58%, and users can buy and sell cryptocurrencies on the platform. "The number of merchants that have been added is really amazing," Cramer said. In the second quarter, PayPal's merchant services volume jumped 48% on a spot basis. "I thought it was a fantastic conference call, with the exception of what they had to say about eBay," Cramer said. He also noted that PayPal's active accounts are now above 400 million. One thing investors should recognize, Cramer added, is that PayPal CEO Dan Schulman "does not talk up his own stock. He never has. He tells you all the things that can go wrong, and then you buy it. You should buy it." Disclosure: Cramer's charitable trust owns shares of PayPay.

The PayPal application is seen on an iPhone

Jaap Arriens | NurPhoto | Getty Images

CNBC's Jim Cramer said Thursday that investors are getting an attractive opportunity to buy shares of a dominant fintech player on a down day.