PYPL - PayPal Stock: The Dip Should Be Bought
2024-07-09 11:22:29 ET
Summary
- PayPal stock basically went nowhere for the past few weeks, while the S&P 500 continued to see new ATH. I think this should change shortly.
- Despite a drop in the total number of users, transaction volume is also growing, which is positive and allows the company to generate a substantial amount of free cash flow.
- PayPal's FCF should help surpass the pessimistic EPS consensus for 2024 if the company continues to repurchase shares at similar volumes and maintains its net income growth rate.
- I expect Wall Street to re-evaluate the current valuation discount, potentially leading to stock price growth and a shift in market sentiment.
- Therefore, I believe the current weakness in PayPal stock, its dip, should be bought.
My Thesis Update
After I initiated coverage of PayPal Holdings ( PYPL ) stock at the end of January 2024 , the stock price continued to remain in its usual price channel that started in mid-last year. So the stock basically went nowhere for the past few weeks while the S&P 500 index ( SP500 ) ( SPY ) continued to update new all-time highs. Unfortunately for me and my bullish thesis, PayPal didn't react to the catalysts that I had assessed as extremely positive back in January and also in April ....
PayPal Stock: The Dip Should Be Bought