PayPal: There Are Reasons To Be Optimistic, But It's Too Early To Buy (Archive)
Improving revenue quality, margins and valuation, but still awaiting clear growth acceleration.
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
- PayPal's revenue quality is improving with increased value-added services, growth in active accounts, and better credit quality of merchant loans.
- PYPL's outlook for transaction margins is positive, driven by better monetization of Braintree and expanded service offerings.
- Valuation is at a 15.5% discount to the median comps, which is attractive given the context of improving operational metrics.
- I'm waiting for proof of revenue growth acceleration under new CEO Alex Chriss.
- CEO Alex Chriss has a good track record of delivering on growth, as evidenced by how he helped Intuit's Quickbooks grow at a 25% CAGR. However, a similar revenue growth acceleration in PayPal is yet to materialize.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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