PayPal Stock Analysis: Why PYPL Is Still a Huge Bargain Right Now

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PayPal Stock Analysis: Why PYPL Is Still a Huge Bargain Right Now

InvestorPlace05-08

In-line with my previous expectations, PayPal (PYPL) stock has delivered strong returns for investors since October. The company reported strong Q1 results, showing that worries about its competition...

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Additionally, I believe the Street is overly worried about threats to PayPal’s dominance.” And I advised investors to “buy the shares on weakness.”The fintech giant’s top line advanced 9.4% last quarter versus the same period a year earlier to $7.7 billion while its total payment volume  jumped an impressive 14% year-over-year  to $404 billion and its earnings per share rose 27% YOY to $1.08.Chriss also indicated that the firm is working harder than under his predecessor to market its fraud-prevention solution. Finally, PayPal has been convincing more small and medium busine","collect":0,"end_time":0,"defaultTopTitle":"investorplace.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4576":"AR","PYPL":"PayPal","QID":"纳指两倍做空ETF","LU0011850046.USD":"贝莱德全球长线股票 A2 USD","SOFI":"SoFi Technologies Inc.",".IXIC":"NASDAQ Composite","BK4506":"内地教育股","BK4575":"芯片概念","BK4566":"资本集团","LU0097036916.USD":"贝莱德美国增长A2 USD","AAPL":"苹果","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","BK4535":"淡马锡持仓","LU0444971666.USD":"天利全球科技基金","BK4559":"巴菲特持仓","PSQ":"纳指反向ETF","LU0289961442.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"AX\" (SGD) ACC","BK4550":"红杉资本持仓","QLD":"纳指两倍做多ETF","QQQ":"纳指100ETF","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","BK4552":"Archegos爆仓风波概念","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","TQQQ":"纳指三倍做多ETF","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","GOTU":"高途","BK4551":"寇图资本持仓","LU0149725797.USD":"汇丰美国股市经济规模基金","BK4585":"ETF&股票定投概念","BK4510":"在线教育","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","BK4512":"苹果概念","IE00BJTD4N35.SGD":"Neuberger Berman US Long Short Equity A1  Acc SGD-H","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","IE00BJTD4V19.USD":"NEUBERGER BERMAN US LONG SHORT EQUITY \"A1\" (USD) ACC","SQQQ":"纳指三倍做空ETF","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","LU0056508442.USD":"贝莱德世界科技基金A2","LU2023251221.USD":"ALLIANZ GLOBAL SUSTAINABILITY \"AM\" (USD) INC","BK4515":"5G概念","LU2089284900.SGD":"Allianz Global Sustainability Cl AM Dis H2-SGD","BK4204":"教育服务","LU0109392836.USD":"富兰克林科技股A","LU0353189680.USD":"富国美国全盘成长基金Cl A Acc","BK4571":"数字音乐概念","BK4507":"流媒体概念"},"translate_title":"PayPal股票分析：为什么PYPL现在仍然是一个巨大的便宜货","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AAPL":1,"SOFI":1,"PYPL":1,"TQQQ":0.6,"PSQ":0.6,"QID":0.6,"QLD":0.6,"QQQ":0.6,"SQQQ":0.6,".IXIC":0.6,"MNQmain":0.6,"NQmain":0.6,"GOTU":0.6},"content_text":"In-line with my previous expectations, PayPal (PYPL) stock has delivered strong returns for investors since October. \nThe company reported strong Q1 results, showing that worries about its competition are overblown.\nPayPal stock has multiple, strong, potential, positive catalysts.  \n\n\n\n\n\n \n\nSource: Michael Vi / Shutterstock.com\n\n\n\nIn a column about PayPal (NASDAQ:PYPL) published on Oct. 19, 2023, I wrote that “PYPL stock trades at bargain-basement levels and has a new, up-and-coming CEO. Additionally, I believe the Street is overly worried about threats to PayPal’s dominance.” And I advised investors to “buy the shares on weakness.” \nThat turned out to be pretty good advice as shares jumped 20% between Oct. 19 and May 6. Also noteworthy is that, during the same period, the shares of SoFi (NASDAQ:SOFI), a popular fintech name that I’ve been bearish on, fell 6%. And now, after PayPal reported standout first-quarter results and with its shares still trading at very low valuations, I continue to recommend that growth-at-a-reasonable-price investors buy the shares. Also importantly, the company has multiple, potential and strong positive catalysts.\nPayPal’s Strong Q1 Results\nThe fintech giant’s top line advanced 9.4% last quarter versus the same period a year earlier to $7.7 billion while its total payment volume (TPV) jumped an impressive 14% year-over-year (YOY) to $404 billion and its earnings per share rose 27% YOY to $1.08.\nThe company’s continued strong revenue and TPV growth show that the Street’s worries about the firm losing market share to Apple‘s (NASDAQ:AAPL) Apple Pay are completely unfounded. And the large increase in its EPS suggests that the cost controls implemented by the firm’s new CEO Alex Chriss are bearing fruit.\nLow Valuation + Positive Catalysts = Buy\nDespite the recent, strong gains of PayPal stock, the name’s valuation  continues to be exceptionally low and attractive.\nIndeed, the shares have a forward price-earnings ratio of 15.3x and an enterprise value/EBITDA ratio of 9.2 times. Given PayPal’s rapid revenue growth and the large increase in its profits, I believe that the stock remains extremely undervalued.\nOn the catalyst front, the firm is testing a new, fast checkout feature. According to Chriss, almost 80% of the consumers who have used the feature in tests utilize PayPal to pay when they check out again. Moreover, the conversion rates of the merchants who use it  rise about 10%, the CEO reported. \nGiven these points, I believe that this offering will significantly increase PayPal’s payment volumes while enabling it to convince more vendors to utilize its platform. \nChriss also indicated that the firm is working harder than under his predecessor to market its fraud-prevention solution. Finally, PayPal has been convincing more small and medium businesses to use its Complete Payments suite. The CEO indicated that the companies that utilize this offering use more of PayPal’s products.\nFinally, Chriss suggested that he would meaningfully increase the company’s low prices going forward.\nOver the longer term, I expect these initiatives, taken together, to enable the growth of PayPal’s top and bottom lines to meaningfully accelerate.\nPlenty of runway for growth\nThere are other indications besides the low valuation of the shares which suggest that the name can advance a great deal.\nFirst,the average price target of Street analysts on the stock is $71.48, meaningfully above its current price of around $65. Second, out of 35 analysts who cover the name, only 15 of them have “buy” ratings on the shares. As more of these analysts “see the light” and upgrade the shares, they are likely to rise meaningfully.\nFinally, the shares have a low Relative Strength rating of 48 and an average Accumulation/Distribution rating of C, according to Investor’s Business Daily. These metrics indicate that the stock has underperformed in the last year, while institutions have not bought a great deal of its in the last 13 weeks. As many more investors realize that PayPal stock is a bargain ,the shares should rally a great deal.\nOn the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.\nLarry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.Financial, FintechGrowth Stocks \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nSubmit\n\n\n\n\n\n\n\nArticle printed from InvestorPlace Media, https://investorplace.com/2024/05/paypal-stock-analysis-why-pypl-is-still-a-huge-bargain-right-now/.\n©2024 InvestorPlace Media, LLC","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"hasMoreComments":false,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}