PayPal Holdings Inc. (PYPL-Q)
296 watching
NASDAQ:PYPL
91.12
5.37
(6.26%) 1d
Financials
Technical Analysis
Buy, Sell or Hold?
Sep 28, 2022, 8:00 pm
0
BUY on WEAKNESS
Allan Tong’s Discover Picks The sum result? PayPal sales slowed and the company lowered its revenue forecasts last November, January and April. In Q2, PayPal posted its first net loss since 2014, despite net revenue growing 9% year-over-year. In August 2021, PayPal shares scaled $288. Now, it's trading below its 50-day moving average of $91.43. Accordingly, PayPal's PE has fallen from 68x from that $288 high to 54x though it tumbled below 25x last June.
Has PayPal hit bottom?
It might have already. The stock dipped below $70 twice over the summer (June 30 and July 14) then touched $100 for a few days during the bear market rally of mid-August. As I write, PayPal is hovering below $90, dragged down along with the rest of the market. Read 2 Stocks on Sale: CAE and Paypal for our full analysis.
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$85.470
Unknown
BUY
This came down so hard so fast that a lot of people bailed. There aren't many new buyers, but they are making money and are happy. PayPal is cutting costs and improving margins with activists involved. They are seeing mid-teen sales growth and are buying back shares. Also, the PE has plunged in recent years.
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DON'T BUY
Doesn't think company warrants investment.
Business has shifted towards higher margin segments of business (lost customers).
Company is highly vulnerable to big banks (electronic payments etc.)
JP Morgan (Jamie Dimon) looking into stealing business from PayPal.
Competitive moat not very strong.
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DON'T BUY
She never liked fintech and never own them. The credit card business is a duopoly. Consumers don't like payment fees. There's a lot of competition in fintech. Doesn't see opportunity here. She owns Visa instead.
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DON'T BUY
She owned it last year for only 6 months. She lost 20%, and down another 55% since then. The problem is slower growth rates. They need to manage costs for ARPU. The payments business is very competitive, so she's still out. That said, this could be an opportunity in a few years.
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WEAK BUY
The new CFO used buybacks when he ran EA and will use the same strategy here. He already announced a $15 billion addition to the current $2.8 billion in buybacks. In the last 3 years they have bought back only $9 billion. The only reason to own this is for the return to shareholders in buybacks.
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COMMENT
vs. Visa Is neutral. This traded at 50x, and now 20x. Maybe it's cheap enough now. PP will be in the penalty box for a long time. Compare this to Visa, he's rooting for an increase in international travel and it's happening. He knows what he's getting with Visa.
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HOLD
Their last two quarters have frustrated her. She blames management who two quarters ago said they would focus less on growing new users, but rather increasing revenue on their user base. An activist could come in. She's hanging on, but running out of patience. She's hanging on because their Venmo is so interesting.
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HOLD
It's down 74% off its peak, 54% YTD, a struggle. Let's see if this activist investor comes in and what he does. He does love their business model. Will watch the next few quarters.
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PAST TOP PICK
(A Top Pick Oct 22/21, Down 69%) The lesson is don't get caught up in the hype of overpaying for stocks. Tailwinds are still there. Profitable, beautiful balance sheet. Market has overreacted to the down side.
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DON'T BUY
Buy now, pay later stocks: Affirm, Upstart, Block and Paypal Upstart is down 92% from its high, Affirm 89%, Block 78% and PayPal 76%. Some of this is due to these stocks being massively massively overpriced to begin with. At peak, Affirm was trading at 30x sales (not earnings), and it won't be profitable before 2026. Block and PayPal are profitable, but were trading at sky-high multiples last year (170x PE and 65x respectively). The market hates the buy-now, pay-later stocks because they don't make money (though are well-run). He liked Upstart early on; it wasn't a buy-not,pay-later story, but helped facilitate loans using technology. But Upstart took on far more credit risk than assumed, which upset him. The business models of these stocks were far better when interest rates were low. Also, more competitors have rushed in now. The lesson: don't be caught up in euphoria. Earnings, valuations and interest rates matter.
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TOP PICK
Recently changed their business model to targeting high-margin customers. Owns Venmo that is performing well. Karen Firestone recently bought some new shares and thinks that looking forward their price will inevitably be higher than today. She gave a BUY ON WEAKNESS signal. Social media mentions are up 2900% since yesterday.
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SELL
Company not preforming as well as investors expected.
Technology not competing with other companies like Visa.
Would sell shares and move capital to traditional software company.
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BUY on WEAKNESS
In recent weeks and today, she had sold some names and is now buying them back. They're down 45-75% from their 12-month high. But she's looking forward and these names inevitably will be higher than today.
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DON'T BUY
Shares fell a lot. A few quarters ago, they changed their model from getting as many subscribers as possible to targeting high-margins subs with higher profits and wider margins. But, their numbers fell dramatically. Their high PE plunged. SO, expectations are much lower; their latest report was received favourably. Is this a bottom? It depends on their execution and the competition. He expects the banks like JPM to compete with PayPal and Square. Be cautious with PayPal, and stick with traditional financials.
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PayPal Holdings Inc.(PYPL-Q) Rating
Ranking : 5 out of 5
Bullish - Buy Signals / Votes : 26
Neutral - Hold Signals / Votes : 4
Bearish - Sell Signals / Votes : 17
Total Signals / Votes : 47
PayPal Holdings Inc.(PYPL-Q) Frequently Asked Questions
What is PayPal Holdings Inc. stock symbol?
PayPal Holdings Inc. is a American stock, trading under the symbol PYPL-Q on the NASDAQ (PYPL). It is usually referred to as NASDAQ:PYPL or PYPL-Q
Is PayPal Holdings Inc. a buy or a sell?
In the last year, 47 stock analysts published opinions about PYPL-Q. 26 analysts recommended to BUY the stock. 17 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for PayPal Holdings Inc..
Is PayPal Holdings Inc. a good investment or a top pick?
PayPal Holdings Inc. was recommended as a Top Pick by on . Read the latest stock experts ratings for PayPal Holdings Inc..
Why is PayPal Holdings Inc. stock dropping?
Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.
Is PayPal Holdings Inc. worth watching?
47 stock analysts on Stockchase covered PayPal Holdings Inc. In the last year. It is a trending stock that is worth watching.
What is PayPal Holdings Inc. stock price?
On 2022-09-28, PayPal Holdings Inc. (PYPL-Q) stock closed at a price of $91.12.
