2024-05-27 08:47:45 ET
Summary
- PayPal's valuation is extremely compelling, with a very low multiple relative to historical averages and compared to revenue and earnings growth.
- The company is focused on reshaping the business and improving innovation and cost efficiency.
- The potential of Venmo and its debit card to drive revenue growth is being overlooked in PayPal's valuation.
- I expect PayPal to significantly outperform in 2025.
Prelude
I first covered PayPal Holdings ( PYPL ) at the end of December with a Strong Buy rating, stating that the bull case is compelling and bear case is crumbling. I followed this up with an earnings review after Q4 report and another Strong Buy rating. The company is lagging the S&P over both time frames. While the stock has been range bound for months, my conviction remains unchanged in the value presented by this stock. I reiterate my Strong Buy rating for the reasons I'll discuss below....
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PayPal: A Great Value Play