Artisan Value Fund’s Views on PayPal Holdings (PYPL)

Core Insights - Artisan Value Fund aims to invest in undervalued companies with strong financial conditions and attractive business economics, achieving a Q4 return of 4.60% compared to 3.81% for the Russell 1000® Value Index [1] - The fund's performance in 2025 was 14.28%, slightly below the index's 15.91%, but it outperformed the index over three, five, and ten years, indicating effective investment discipline [1] Company Highlights - PayPal Holdings, Inc. is a leading technology platform for digital payment solutions, with a market capitalization of $41.34 billion [2] - PayPal's stock closed at $44.90 on March 13, 2026, with a one-month return of 11.44% but a 52-week loss of 35.53% [2] - PayPal has over 200 million monthly active accounts and processes 26 billion transactions annually, amounting to $1.7 trillion in payment volumes [3] Investment Analysis - PayPal was identified as a significant detractor in the fund's performance, despite its established market position and strong customer data [3] - The current CEO, who joined in 2023, is revitalizing the company after previous management issues, with shares currently trading at 10X next year's expected earnings, suggesting an attractive valuation [3] - The payments industry is highly competitive, and while PayPal has advantages, its future growth is uncertain, necessitating a focus on stabilizing market share and returning to higher growth rates [3]