- $5 billion FCF
- buying back 4-5% of shares outstanding per year at current valuations
- Q3 results showed 8% revenue growth, upped guidance for FY23
- great balance sheet: lots of cash on hand, mediocre debt: all aquired at all-time low interest rates
- market leader in a market that's going to see secular growth of 8,9% CAGR through 2030
- new CEO and new CFO, the latter coming from CFO at consulting giant EY. Those people know which strings to pull
And even though it traded at 10x forward PE a couple weeks ago, people still saying it's a dying company, no moat, blabla. I laugh at those suckers. Just like I laughed at people not willing to buy Alphabet under $100. Just like I laughed at people dumping oil shares in 2020 at absolute bottom prices 'cause oil is going away'. This is called 'sentiment'. Sentiment for Paypal is absolutely horrific (case in point: every comment section on a Paypal thread) even though the most recent financials showed literally NO weakness at all. They even increased guidance to $4,98 per share for 2023 for fucks sake.
This is why people can't beat the market. An obvious opportunity presents itself, but they'll still scream "value trap" without any knowledge, even though it's a growing company in a growing market with absolutely monsterous free cash flow. I'm in at $53 average. See you all in a year or two so I can have a laugh at everyone saying $58 is fair value LMAO. At current valuations, assuming the same pace for buybacks and no FCF growth at all, Paypal will have bought back the entire free float by 2032.
To answer your question: I won't sell below $90 before 2025. Extremely conservative napkin math:
FY23 EPS = $4.98 and assuming a ridiculous lowball 1,5% EPS growth and 4% reduction of outstanding shares per year
So for FY25: $5.50 EPS with a 15x multiple = $82.5
$PYPL$ Bullish
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