Daiwa Capital Markets upgraded shares of the fintech to Outperform from Neutral.
PayPal's stock tumbled as its growth cooled off. A few green shoots appeared in the first half of 2024.
PYPL remains substantially undervalued, despite another strong quarterly earnings report, an upward guidance revision, and several other favorable developments. The stock market is a voting machine in the short term, and it appears that the market's sentiment is substantially lagging behind PayPal's rapidly improving fundamentals. My discounted cash flow model indicates that the current valuation is an exceptional opportunity.
We've also got a look at the life cycle of companies.
PayPal's earnings results included stabilized margins, accelerating engagement, and guidance raises. The stock trades at just 15 times its estimated 2024 earnings.
PayPal has benefited from e-commerce growth but is facing headwinds due to increased competition in the digital payments industry. Despite strong Q2 earnings, user growth is declining, and the company's product mix is inferior, underpinning cracks. A blended P/E of 12.9x is cheap in today's pricey market, yet I see no valuation expansion with negative EPS growth in FY24.
Mizuho analysts are upbeat on the launch of the Fastlane one-click guest checkout system.
Paypal (PYPL) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
PayPal's Q2'24 results showed strong account growth, and the Fintech raised its outlook for free cash flow and stock buybacks. The Fintech added 1.8M customers to its payments platform in Q2 and reported double-digit growth in transactions per active account. PayPal generated $1.1B in free cash flow in the last quarter.
PayPal stock is trading down 80% from all-time highs but still growing revenue quickly. Its profits and margins are climbing again.
PayPal is 79% below its all-time high price of $310 per share. The company is undergoing a transition year under its new CEO.
PayPal reported strong Q2 earnings and once again increased its guidance. Importantly, its transaction margin dollars, a recent area of weakness, showed strong growth.