PayPal: Sell Now To Avoid Growth Challenges In 2025 (Archive)
PayPal’s weak user trends and Braintree headwinds overshadow its discounted valuation and improved credit metrics, warranting a Sell rating.
This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.
Elevator Pitch
- Despite mild positive beats in Q4 results, I have a pessimistic outlook on PayPal due to poor revenue quality via stagnant active account growth and falling transactions per active account.
- I expect revenue growth challenges to persist in FY25, driven by Braintree renegotiations that would lead to further volume declines in transactions per active account.
- On the positive side, the Company's credit risk metrics have improved, and the stock trades at a 27% discount to peers on a 1-yr fwd PE basis.
- Overall, given the uninspiring revenue outlook and bearish technical chart setup, I rate PYPL stock a 'Sell,' expecting it to underperform the S&P 500 in the months and quarters ahead.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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