PayPal Holdings Inc. PYPL is on the verge of triggering a Death Cross, a bearish technical signal where the 50-day simple moving average falls below the 200-day moving average. While the stock has tumbled 23.7% year to date and 5.7% in the past month, analysts at Mizuho still see upside, maintaining an Outperform rating with a $96 price target, reported Investing. Mizuho Remains Bullish Despite PayPal stock's technical struggles, Mizuho remains optimistic about its long-term prospects. The firm sees growth ...

The S&P 500 might be trading 7% below the record high it touched in February, but investors are still concerned about high stock valuations. This makes perfect sense in the wake of the index's strong gains in 2023 and 2024. Across those two years, it rose by about 53%. But all hope isn't lost for those still trying to find some reasonably valued equities to add to their portfolios. For those willing to look at beaten-down companies, there might still be lucrative opportunities to allocate capital with a lon ...

Core Viewpoint - PayPal's stock has faced significant declines due to increased competition in the fintech sector and a challenging macroeconomic environment, but its strong portfolio and expanding partner base present long-term investment opportunities [1][20]. Financial Performance - PayPal shares have dropped 17% year to date and 24.3% since reaching a 52-week high of $93.66 on December 9, 2024 [1][2]. - The stock is currently trading at a forward 12-month P/E of 13.7X, which is a significant discount compared to the industry average of 23.56X [2]. - Over the trailing 12 months, PayPal shares appreciated 6.5%, underperforming the industry’s 17.7% growth [5]. Operational Highlights - Total active accounts increased by 2% year over year to 434 million in 2024, with payment transactions rising 5% to 26.33 million [11]. - Total payment volume (TPV) grew 10% year over year to $1.68 trillion, with transaction margin in dollar terms increasing by 7% [12]. - The Buy-Now-Pay-Later TPV surged 21% year over year to $33 billion [12]. Strategic Initiatives - PayPal's Fastlane feature enhances the checkout experience, attracting new users, with 75% of Fastlane consumers being new or dormant users [13]. - The launch of FX-as-a-service and network tokens for automated billing is expected to drive transaction margins [14]. - PayPal Everywhere initiative led to a nearly 100% increase in debit card TPV, with over 1.5 million first-time debit card users added in Q4 2024 [15]. Partnerships and Collaborations - PayPal's partnerships with companies like Fiserv, Adyen, Amazon, and Shopify are enhancing its market prospects [16][17]. - Integration with Shopify Payments and collaborations with Apple and Google for Venmo debit card integration are noteworthy developments [17]. Earnings Guidance - PayPal expects non-GAAP earnings per share growth of 6-10% for 2025, with higher growth anticipated for 2027 [19]. - The Zacks Consensus Estimate for 2025 earnings is $5.02 per share, indicating a 7.96% growth over 2024 [19]. Conclusion - PayPal's robust portfolio, expanding partner base, and attractive valuation make it appealing for long-term investors, despite facing short-term competitive pressures [20].

Core Insights - PayPal has surpassed $30 billion in global loan originations for small businesses since 2013, providing over 1.4 million loans to more than 420,000 business accounts worldwide [1][2] Company Offerings - PayPal's merchant lending solutions, including PayPal Business Loan and PayPal Working Capital, aim to assist small businesses in accessing capital, featuring a streamlined online application process with funding available within minutes [2][3] - PayPal Working Capital, launched in 2013, is available in multiple countries and is repaid as a percentage of the borrower's PayPal sales [3] - PayPal Business Loan, introduced in 2017, offers term loans with fixed repayments and is accessible to businesses regardless of whether they use PayPal for payment processing [4] Market Trends - Embedded lending solutions are increasingly favored by small- to medium-sized businesses (SMBs) seeking funding for unplanned expenses or growth, with 37% of SMBs showing high interest in switching to providers offering such options [5] - In 2023, small business loans saw a decrease as lending standards tightened, with a reported 5.1% decline in small business loans originated [5]

Core Insights - PayPal has originated over $30 billion in loans and cash advances, providing more than 1.4 million loans to over 420,000 business accounts globally since 2013, addressing the capital needs of small businesses [1] - Small businesses contribute significantly to the economy, accounting for over 43% of U.S. GDP and nearly 40% of private sector payroll, yet access to capital remains a major challenge for them [2] - PayPal offers financing solutions such as PayPal Business Loan and PayPal Working Capital, which are designed to support small business growth and are accessible through a streamlined online application process [3][4] Company Offerings - PayPal Business Loans are term loans with fixed repayments available to all businesses, while PayPal Working Capital is repaid as a percentage of PayPal sales, providing flexibility for small businesses [3] - Both financing solutions have received high customer satisfaction ratings, with Net Promoter Scores of 76 for PayPal Working Capital and 85 for PayPal Business Loan, and over 90% of customers renew or access these offerings repeatedly [4] - Businesses utilizing PayPal Working Capital have seen a 36% increase in total PayPal payment volume, while those taking a PayPal Business Loan experienced a 16% increase [4] Industry Context - The challenges of securing traditional business loans are highlighted, with many small business owners facing difficulties in the application process, making PayPal's quick funding solutions particularly valuable [4] - The importance of access to capital is underscored by testimonials from entrepreneurs, illustrating how PayPal's financing has been crucial for business growth, especially for underrepresented groups [5]

Company Performance - Paypal's stock closed at $70.97, reflecting a +1.11% change from the previous day, while the S&P 500 gained 1.77% [1] - Over the past month, Paypal's stock has decreased by 6.35%, which is better than the Business Services sector's decline of 7.87% but worse than the S&P 500's loss of 5.73% [1] Upcoming Earnings - The upcoming EPS for Paypal is projected at $1.16, indicating a 17.14% decrease compared to the same quarter last year [2] - Revenue is expected to reach $7.82 billion, representing a 1.57% increase from the year-ago quarter [2] Fiscal Year Estimates - For the entire fiscal year, earnings are projected at $5.02 per share, with revenue expected to be $32.98 billion, reflecting increases of +7.96% and +3.72% respectively from the prior year [3] Analyst Projections - Recent shifts in analyst projections for Paypal are important to monitor, as they often reflect changes in short-term business dynamics [4] - Positive revisions in estimates suggest a favorable outlook on the company's business health and profitability [4] Zacks Rank and Valuation - Paypal currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate having increased by 0.04% in the past month [6] - The Forward P/E ratio for Paypal is 13.98, which is lower than the industry average of 15.25 [6] PEG Ratio - Paypal has a PEG ratio of 1.19, compared to the Financial Transaction Services industry's average PEG ratio of 1.41 [7] Industry Context - The Financial Transaction Services industry is part of the Business Services sector, which has a Zacks Industry Rank of 133, placing it in the bottom 48% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Viewpoint - The article discusses the investment potential of PayPal Holdings, Inc. and emphasizes the importance of independent research in identifying actionable investment ideas [1]. Group 1 - The previous article on PayPal highlighted the potential regret for sellers who bet against the company's growth, suggesting a strong outlook for the stock [1]. - The investment style promoted by the company focuses on providing clear and actionable insights, which can be beneficial for investors looking for reliable information [1]. Group 2 - The company claims to have assisted its members in outperforming the S&P 500 while avoiding significant losses during periods of high volatility in both equity and bond markets [2]. - A risk-free trial is offered to potential members, indicating confidence in the effectiveness of their investment strategies [2].

Group 1 - The article discusses the investment positions of Parkev Tatevosian, CFA, in PayPal and Visa, indicating a positive outlook on these companies [1] - The Motley Fool recommends long positions in PayPal options, specifically January 2027 $42.50 calls, and short positions in March 2025 $85 calls on PayPal, suggesting a strategic approach to trading [1] - The article highlights that Parkev Tatevosian is affiliated with The Motley Fool and may receive compensation for promoting its services, which could influence his opinions [1]

Group 1 - The article discusses the limitations of growth companies, emphasizing that they cannot sustain high growth indefinitely, as illustrated by the proverb "Trees don't grow to the sky" [1] - The author identifies a long-term investment strategy focused on finding companies with high potential for revenue and earnings growth that are not fully reflected in current market prices [1] - The investment approach is sector agnostic but favors less cyclical and higher growth areas, with a geographical bias towards the United States [1] Group 2 - The author has a preference for companies that are GAAP profitable, and if investing in unprofitable companies, it will only be a small position [1] - Writing is used as a tool to clarify thoughts and maintain rigor in the research process, which is recommended for all active investors [1] - The author expresses appreciation for the Seeking Alpha community and views becoming a contributor as a natural step in sharing insights [1]

Group 1 - PayPal's stock has experienced a significant correction, dropping over 20% after Q4 2024 earnings, from a trading price close to $90 [1] - The correction in PayPal's stock price is perceived as overdone, suggesting potential for recovery [1] Group 2 - The company operates within the technology sector, which has shown volatility, impacting stock performance [1]