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# PayPal: Too Many Issues To Reckon With (Archive)
- URL: https://www.huntingalphas.com/paypal-too-many-issues-to-reckon-with-archive/
- Published: 2024-01-03T12:49:00.000Z
- Updated: 2026-02-27T06:11:33.000Z
- Description: PayPal’s growth and margins look fragile, making today’s cheap valuation a value trap risk.
- Author: Vish (Hunting Alphas)
- Tags: 5-Minute Pitches, #noindex, Archive, #sa-origin, PYPL, Financials

*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

- The Seeking Alpha Analyst Community seems to be broadly bullish on PayPal. Wall St is split between Neutral to Bullish. I belong to the Neutral camp.
- PayPal's revenue is showing some signs of a growth rebound. However, I believe the quality of this growth is poor and unsustainable.
- Transaction take rates are falling and the most important growth driver - active accounts - is showing signs of saturation amid signs of user-share loss.
- On the margins side, management's efforts in controlling opex have been undermined by gross margin weakness driven by a dilutive revenue mix shift and hits due to credit losses on merchant loans, which are expected to continue.
- Valuations are undemanding, but I believe that alone is insufficient to make a compelling buy case. I prefer to wait and demand evidence of healthy growth turnaround and gross margin resiliency first.

Read the full article [here](https://seekingalpha.com/article/4660938-paypal-too-many-issues-to-reckon-with?ref=huntingalphas.com).

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