Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
Best Value Stock Analysis : 16 March 2024
NYSE: PayPal Holdings (PYPL)
- PayPal Holdings operates as a technology platform facilitating digital payments for merchants and consumers globally.
- The company holds a significant position in the digital payments sector, anticipated to undergo robust growth over the next five years.
- The company offers payment solutions under various brands including PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy.
- Paypal stock is currently almost 60% undervalued, presenting a compelling investment opportunity.
Top Institutional Shareholdings of Paypal Holdings Inc. (PYPL):
| Holder | Shares | Date Reported | % Out | Value |
|---|---|---|---|---|
| Vanguard Group Inc | 90,025,537 | Dec 30, 2023 | 8.40% | 5,658,104,863 |
| Blackrock Inc. | 72,525,349 | Dec 30, 2023 | 6.77% | 4,558,218,073 |
| State Street Corporation | 45,367,317 | Dec 30, 2023 | 4.23% | 2,851,335,804 |
| Comprehensive Financial Management, LLC | 28,596,618 | Dec 30, 2023 | 2.67% | 1,797,297,397 |
| Geode Capital Management, LLC | 21,251,436 | Dec 30, 2023 | 1.98% | 1,335,652,720 |
| Polen Capital Management, LLC | 20,794,484 | Dec 30, 2023 | 1.94% | 1,306,933,287 |
| Morgan Stanley | 16,292,147 | Dec 30, 2023 | 1.52% | 1,023,961,414 |
| Norges Bank Investment Management | 12,205,841 | Dec 30, 2023 | 1.14% | 767,137,088 |
| Northern Trust Corporation | 11,122,360 | Dec 30, 2023 | 1.04% | 699,040,309 |
| Deutsche Bank Aktiengesellschaft | 11,114,994 | Dec 30, 2023 | 1.04% | 698,577,355 |
What we think are PROs of PAYPAL Holdings:
- Paypal experienced 8.7% year-over-year revenue growth and saw adjusted EPS increase from $1.24 to $1.48.
- Current valuation ratios are significantly lower than historical averages, signaling substantial undervaluation.
- Based on DCF simulation, PYPL is projected to be valued at $100 billion, indicating the stock is approximately 49% undervalued, presenting a compelling investment opportunity.
- Recent developments have further strengthened the management’s ability to sustain revenue growth and enhance profitability.
What we think the RISKs of PAYPAL Holdings:
- The market is still very cautious about PYPL’s ability to return to its lower levels.
- The market is currently driven by “Extreme Greed,” fueled by AI’s rapid adoption. So, any potential pullback, not due to PYPL-specific reasons, could offer an excellent buying opportunity amidst market softness.
- Investing in PayPal carries risks including bearish sentiment, legal and regulatory challenges, competition, and cybersecurity threats.
FUNDAMENTALS:
Market Cap. = 67.35B
P/E Ratio = 16.37
52-week Range = 50.25 – 77.95
Revenue = 29.77B
EPS = 3.85
- Technical Analysis:
- – Stock is trading at its 7 years low levels and preparing for a bounce.
- – Volumes are constantly increasing on the weekly charts which shows the accumulation of this stocks by institutional investors.
- -It is very far away from its moving average and it may give a good bounce towards its higher levels near EMA resistance.
- – There is also a trendline breakout on the daily charts and weekly charts as well.
- – Our First Target will be 85 and then price will jump towards 122.
- – RSI is also trading flat and now it is preparing for good bounce towards 70 or 80 levels.
Entry: 65
Target: 85 / 100 / 122
Stoploss: 50
- Our Final Thought: I think that the company will see a lot of moves to the upside for the next couple of quarters because the recently announced initiatives will take time to show results, whether positive or negative. I also don’t think the company will see much more downside risk, and it looks like the company is trading at a bottom.
Management’s emphasis on enhancing profitability and investing in innovation supports the optimistic outlook for the stock. Paypal Holdings is progressing well towards a turnaround, with a strong financial position improving through debt payments.
Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
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