Paypal (PYPL) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
The 2020s have been quite an up-and-down period for PayPal (PYPL -0.93%). After all, it was a star stock during the pandemic, but it slumped a bit when U.S. consumers started to emerge from their stay-at-home isolation.
Block Inc. (XYZ) reports earnings after the closing bell. Caroline Woods notes bullishness on Wall Street, pointing to 77% of analyst buy ratings surrounding the Cash App owner.
In this podcast, Motley Fool analyst Jim Gillies and host Ricky Mulvey discuss:
After more than a year with the new CEO in charge, PayPal's future looks brighter. Commerce, a strategy shift, and numerous new initiatives are shaping the company. Key areas of focus will likely be crucial to the successful transformation and Venmo has a special place in the company's game plan. PayPal's competitive moat is not fully utilized. The payment and commerce ecosystems offer a wide range of growth opportunities.
PayPal's Q4 earnings showed strong financials, but were met with a sharp price correction. The price pullback presents a buying opportunity due to organic growth potential and also aggressive share buybacks under cheap P/E ratios. This combination creates a double-compounding mechanism.
PayPal Ventures and Citi Ventures are investing in Finmo, a startup that uses AI and other technologies to develop what it describes as a next-generation treasury operating system. PayPal Ventures and Quona Capital led the Series A round of $18.5 million, which was oversubscribed.
PYPL's cheap valuation, strong portfolio and expanding clientele make the stock attractive.
PayPal's strategic shift under Alex Chriss focuses on profitable growth by enhancing core strengths, increasing user engagement, and accelerating innovation velocity. Q4 earnings showed mixed results with revenue and EPS beats, but higher OpEx led to market disappointment; while strategic initiatives aim for long-term outperformance. Key initiatives include enhancing checkout experiences, expanding debit and credit offerings, and boosting SMB merchant onboarding to drive user habituation and profitable growth.
PayPal remains deeply undervalued, trading at ~15x forward earnings, driven by a 60% YoY surge in free cash flow and a $15B buyback. TPV grew 10% YoY to ~$1.7T, while revenue increased 7% YoY to $32B in CY24. Unbranded processing (Braintree) grew to 36% of TPV, while Branded Checkout fell to 28%, impacting margins and profitability.
A lot has changed at PayPal Holdings (PYPL 1.80%) recently. Chief Executive Officer Alex Chriss took over a year and a half ago and set new strategies into motion, and the stock price is up more than 30% during the past year.
Bank of America is one of the largest banks in the United States and has a market capitalization of about $350 billion, as of early 2025. There are few other financial stocks that have achieved this level of valuation.