Fintech stocks have been languishing since the end of the post-Covid boom, and most fintech names have been trading at bargain-basement levels for the past two years. That said, I believe it makes sense to use this near-term weakness as an opportunity to buy some of the top fintech stocks for the long-haul.
InvestorPlace contributor David Moadel predicted in early June that PayPal (NASDAQ: PYPL ) stock, because of a combination of factors, should hit $90 in the next 12 months. I said in late March that it was time to buy PayPal stock given it was up 34% from its five-year low in October 2023.
PayPal Holdings remains a leading global fintech player and continues to benefit from the strong secular tailwinds behind its industry. While the stock price remains stagnant, PayPal's operational performance tells a very different story. The company continues to exhibit solid growth across its diverse range of payment businesses. PayPal is heavily undervalued with a 9.5x trailing P/FCF ratio, strong balance sheet, and forecasts for continued growth.
PayPal (NASDAQ: PYPL) stock price is falling apart as attempts to recover find substantial resistance. It has plunged to a low of $58.25, its lowest point since March 7th.
Paypal (PYPL) closed at $58.26 in the latest trading session, marking a -1.8% move from the prior day.
PayPal stock is down 50% over the past five years. Ouch! But the core business is growing, and new leadership is innovating.
If you're scouting for fintech stocks to buy, now is the right time to hop in. The fintech space is ripe with potential.
Macroeconomic tailwinds could work in this beaten-down growth stock's favor as consumer behavior adjusts.
PayPal has improved the EPS growth trajectory and is showing the same EPS growth momentum it had pre-pandemic. Between 2015 and 2019, the EPS grew from 0.8 to 2.1 which is equal to 22% CAGR and the recent EPS growth projections show a similar trend line. PayPal is investing close to $5 billion annually on buybacks which should improve EPS growth by 8%-10% on a standalone basis.
Goldman Sachs analyst Will Nance assumed PayPal Holdings PYPL with a Neutral rating and a price target of $69.
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.
Apple's new payment products released at the WWDC pose a direct threat to PayPal. PayPal continues to innovate enough for solid growth, but the payments company has failed to create the types of products to distinguish the company from competition like Apple Pay. The stock remains undervalued, trading at ~12x full non-GAAP EPS estimates, though the company has confused the market by now including SBC in estimates.