chipzzy
10-06

$PayPal(PYPL)$ It'd be great if they sold off 8-10 low margin assets and made greater strides in reducing expenses.

But, let's say Paypal, in terms of FCF and Rev, stay with the exact same growth rate as they have demonstrated in 2024 over the next 5 years. And they use all FCF for Buybacks. Just like they are doing right now. Where will PYPL's share price be in 5 years?

Buybacks have a huge effect on EPS due to the "denominator effect" and these earnings beats quarter after quarter pushes up their share price.

Autozone's share price rose to around $500/share at the time they bought back 50% of their shares. When they got up to owning 90% of their shares, today, it's at $3,075/share.

PYPL's FCF rose in 2024. If that continues, as expected, then PYPL, I think, could buy up, via buybacks, 50% of their shares. That means by 2029, it could be a $400+/share stock. But if that's correct, then that means PYPL's share price will gradually rise from $76/share to $400/share over the next 5 years with the largest jumps at ER.

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