With just one subscription to Beyond the Wall Investing , you can save thousands of dollars a year on equity research reports from banks. You'll keep your finger on the pulse and have access to the latest and highest-quality analysis of this type of information.I wrote about PayPal Holdings, Inc. (NASDAQ: PYPL ) stock in January 2024 with a "Strong Buy" rating , stating that the new strategy that the new management announced back then shouldHe leads the investing group Beyond the Wall Investing with feature ...

Core Viewpoint - PayPal's stock has entered bear market territory, showing a significant decline, but its fundamentals indicate it may be undervalued and present a buying opportunity [1][2]. Financial Performance - In 2024, PayPal generated $6.8 billion in free cash flow, a substantial increase from $4.2 billion in 2023 [2]. - Q4 earnings per share (EPS) were $1.19, exceeding estimates by $0.07, with revenue rising 4.2% year-over-year to $8.37 billion [2]. - Total payment volume (TPV) grew 7% year-over-year to $437.8 billion in Q4, reaching $1.68 trillion for the full year, a 10% increase [2]. User Growth and Market Position - Despite a 3% dip in payment transaction volume (PTV) in Q4, full-year PTV increased by 5% to 26.3 billion [3]. - PayPal added 8.8 million active accounts, bringing the total to 434 million, with users making 3% more transactions on average [3]. - The company ended Q4 with $15.1 billion in cash and $11.1 billion in total debt, providing significant financial flexibility [3]. Forward Guidance - PayPal raised its forward guidance for Q1 2025, projecting EPS between $1.15 and $1.17, with a midpoint of $1.16, compared to consensus estimates of $1.13 [4]. - For the full year 2025, EPS guidance is set between $4.95 and $5.10, with a midpoint of $5.03, above the consensus estimate of $4.90 [4]. Valuation Metrics - PayPal's stock trades at a P/E ratio of 14.58 and a forward P/E of 11.6, both significantly below the financial transaction services industry average of 23.28 [6]. - The price-to-free cash flow (P/FCF) ratio is 13.88, and the price-to-sales (P/S) ratio is 1.82, indicating the market may be undervaluing its growth potential [6]. Treasury Stock Holdings - PayPal's treasury stock holdings have grown to $18.5 billion, providing flexibility for future acquisitions and employee compensation plans without diluting current shareholders [7][9]. - The value of treasury stock has decreased from $27.09 billion at the end of 2024 to $18.49 billion as of April 3, 2025, due to stock price decline [8]. Resilience to Economic Factors - PayPal is not directly impacted by U.S. tariffs as it earns revenue from transaction processing services and does not import goods [11]. - Cross-border payment volume accounted for 13% of TPV in Q4, totaling $56.9 billion, indicating growth in international transactions [11].

Core Viewpoint - PayPal's valuation has dropped below a P/E of 20, attracting interest from investors [1] Group 1: Company Performance - PayPal's share price has decreased amid the current tariff selloff [1] Group 2: Investment Strategy - The focus is on identifying great businesses at reasonable prices for long-term holding [1] - There is a slight bias toward technology companies, but a broad perspective is maintained, including opportunities in crypto [1] - A global approach to investing is emphasized, with value sought beyond the U.S. market [1]

SAN JOSE, Calif., April 7, 2025 /PRNewswire/ -- PayPal Holdings, Inc. (NASDAQ: PYPL) announced today that Rodney C. Adkins has informed the company of his decision to retire from its Board of Directors (Board) and not stand for re-election at the 2025 Annual Meeting of Stockholders in June.  Adkins has been a director of PayPal since September 2017 and currently serves on the Audit, Risk and Compliance Committee and the Corporate Governance and Nominating Committee of the Board. "For more than seven years, ...

Market Overview - The Nasdaq Composite index has fallen over 11% since the beginning of the year, raising concerns about the economic outlook due to trade wars and tariffs [1] - Despite the downturn, this period may present opportunities for long-term investments [1] Investment Opportunities Amgen - Amgen's shares have increased by 17% in 2025, yet it remains a relatively inexpensive healthcare stock, trading at just under 15 times next year's estimated earnings [3] - The company reported a 19% growth in revenue last year, reaching $33.4 billion, with significant contributions from blockbuster drugs like Repatha and Prolia, which generated $6.6 billion in sales [4] - Amgen is developing a promising injectable GLP-1 treatment for weight loss, MariTide, which could enhance its stock value upon approval [5] PayPal - PayPal's growth has been modest, with a 4% increase in the last quarter of 2024, attributed to a challenging economic environment [7] - Despite a 2% year-over-year decline in earnings to $4.1 billion, the brand remains strong and trusted among consumers [7] - The stock is currently trading at 13 times its estimated future earnings and has dropped over 24% this year, presenting a potential recovery opportunity as economic conditions improve [8] Baidu - Baidu is the cheapest stock on the list, with a forward price-to-earnings ratio of just 10, and its stock price has risen by 8% this year [9] - The company is heavily investing in artificial intelligence, with its AI chatbot Ernie Bot reaching 200 million users and plans to release an updated model this year [10] - Despite a 1% decline in sales to $18.2 billion in 2024, Baidu's AI cloud business is growing at 24%, indicating strong future growth potential [10][11]

Core Insights - PayPal is expanding its PayPal Ads program to the United Kingdom, which allows brands to display personalized ads to consumers based on their previous purchases [1][2] - The launch of PayPal Ads in the U.K. will occur in phases, with ads expected to be visible to customers starting in July [2][3] Company Strategy - PayPal aims to create a marketing and revenue channel that is essential for both large and small merchants, leveraging its consumer knowledge to help brands reach empowered shoppers [2][4] - The program is designed to enhance the shopping experience for PayPal users by providing insights based on shopping intent and transaction data, enabling brands to create targeted messaging and campaigns [3][4] Industry Trends - The expansion of PayPal Ads aligns with the growing demand for hyper-personalized customer experiences, which are crucial for digital engagement and customer loyalty [4][5] - Retailers are increasingly focusing on tailored interactions to improve customer satisfaction and retention, driven by concerns over fraud and the need for competitiveness [4][5]

Core Viewpoint - PayPal Holdings Inc. is facing a bearish trend indicated by a potential Death Cross, with analysts maintaining an optimistic long-term outlook despite recent stock struggles [1][3]. Technical Analysis - PayPal stock has declined 23.7% year to date and 5.7% in the past month, struggling below key moving averages, which reinforces a bearish trend [1]. - The Moving Average Convergence Divergence (MACD) indicator is at a negative 2.21, indicating further downside risk, while the Relative Strength Index (RSI) is at 32.09, approaching oversold territory [2]. Analyst Outlook - Mizuho maintains an Outperform rating with a price target of $96, citing growth potential in Pay with Venmo, which is expected to grow over 40% annually, potentially boosting overall transaction margin dollar growth [3]. - PayPal's valuation is at 17 times its estimated 2026 earnings per share, slightly above the median for legacy payments firms but below historical levels, with strategic initiatives justifying this premium [4]. Strategic Initiatives - PayPal is focusing on growth plans, including the appointment of Joy Chik from Microsoft to the Board, signaling a commitment to AI-driven innovation [5]. - The decision by Apple to open its NFC chip to third-party apps could enable PayPal to expand its tap-to-pay services, which may significantly impact mobile payments [5]. Future Prospects - Despite the current bearish trend, if PayPal's strategic initiatives gain traction, there is potential for the stock to recover and defy skeptics [6].

Core Viewpoint - The S&P 500 is currently trading 7% below its record high, yet concerns about high stock valuations persist, especially after a significant 53% rise in 2023 and 2024 [1] Company Overview - PayPal's stock is trading 77% below its peak from July 2021, despite the company's fundamentals suggesting potential for optimism [3] - The company reported Q4 revenue of $8.4 billion and adjusted earnings per share (EPS) of $1.19, both exceeding Wall Street expectations, but the stock fell 13% post-release due to lower-than-expected total payment volume [4] Financial Performance - PayPal's revenue growth slowed in 2024, increasing by 7% compared to 8% in 2023, influenced by a shift in consumer spending patterns and declining consumer confidence [5] - The company generated $6.8 billion in free cash flow over the last 12 months and anticipates $6.5 billion for the current year, with plans to allocate approximately $6 billion for share repurchases [6] Competitive Strengths - PayPal maintains a strong brand reputation in the payments industry and benefits from a robust network effect due to its two-sided ecosystem [7] - The management is focused on enhancing its commerce platform and improving services for both merchants and consumers [8] Market Potential - Management estimates PayPal's total addressable market for revenue exceeds $1.1 trillion, with long-term goals of achieving 20% annual adjusted EPS growth [9] Valuation and Outlook - PayPal shares are currently trading at a forward P/E ratio of 14.1, representing a 33% discount compared to the S&P 500's forward P/E [10] - While concerns about slower growth persist, the company's strategic priorities and financial targets may provide investor confidence [12] - The combination of improving fundamentals and discounted valuation suggests potential for adequate returns over the next five years, making it a promising option for long-term investors [13]

A great company with temporary uncertainty When President Trump recently announced 25% tariffs on cars that aren't made in America, General Motors (GM 0.80%) was one of the hardest-hit auto stocks, and for good reason: About 30% of the vehicles GM sells in the United States are built in either Canada or Mexico, and another 18% are built in other foreign countries. This could certainly weigh on GM's business in the short term, but from a long-term perspective, GM is an extremely cheap stock with a lot to lik ...

Core Insights - Warren Buffett's value investing strategy remains relevant even in a high-valuation market, emphasizing the need to identify opportunities [1] Company Overview - PayPal experienced significant growth during the pandemic but has faced a decline in growth as consumer behavior normalizes, with its share price currently 77% below its July 2021 peak [3] - A new CEO, Alex Chriss, was appointed in September 2023 to lead a turnaround, implementing several strategic updates to enhance the consumer experience [4] - PayPal is focusing on merchants with the introduction of PayPal Open, a platform that facilitates payments and offers value-added services [5] Strategic Initiatives - The company is adopting a price-to-value strategy to prioritize profitability over growth, aiming to transform from a payments company into a commerce platform [6] - Management aims to increase non-GAAP earnings per share growth to at least 20% per year by improving transaction margins, controlling costs, and buying back shares [7] Competitive Landscape - The payments industry is highly competitive, with numerous players vying for market share among consumers and merchants [8] - PayPal has a strong market position, with $1.7 trillion in total payment volume projected for 2024 and 434 million active accounts, benefiting from a robust brand and network effects [9] Valuation - PayPal's stock is currently trading at 14 times forward earnings, significantly below the market average, presenting a compelling opportunity for value investors [10] - The combination of profitability, growth potential, and innovative strategies makes PayPal an attractive investment despite uncertainties regarding management's ability to meet earnings targets [11]