PayPal Stock Analysis - is PayPal's Stock a Good Buy Today? | Summary and Q&A

TL;DR

PayPal stock has faced a significant drop but may be undervalued, with positive growth in active accounts and total payment volume. However, concerns about declining take rates and the future growth of the company exist.

Key Insights

• 😀 PayPal's stock has faced a significant decline, possibly presenting an undervalued opportunity for investors.
• 💪 The company has a strong focus on consumers, with a large user base of 292 million consumer accounts.
• 🤨 Positive trends in active accounts and total payment volume indicate the potential for growth, although recent slowdowns raise concerns.
• ☠️ The decline in PayPal's take rate is a concern, as it may impact revenue growth in the future.
• 🥶 Revenue, net income, and free cash flow have shown positive growth, aligning with the company's business trends.
• 🥶 Analyst estimates for free cash flow suggest a fair value for PayPal stock that indicates it may be undervalued.
• 🏣 The future growth of PayPal may be impacted by the post-COVID shift in transactional behavior and increased offline transactions.

Transcript

hi i'm jimmy in this video we're looking at paypal stock ticker symbol pypl in this video we're going to look quickly at paypal's business we're going to run through some of their numbers and then we're going to try to come up with a fair value of paypal stock using discount of free cash flow but before we jump in i just want to introduce you real ... Read More

Questions & Answers

Q: How does PayPal define its business, and what brands does it include?

PayPal encompasses brands like Venmo, Honey, Braintree, and Zettle, serving businesses and consumers in processing transactions and moving money.

Q: How has PayPal's stock performed in recent times?

PayPal's stock has dropped by about 65% since its peak in July, raising concerns among investors.

Q: What metrics does PayPal use to track the progress of its business?

PayPal uses active accounts and total payment value as metrics to monitor its business growth. While the number of active accounts has been rising, there are concerns about the actual definition of "active" users. Total payment volume has shown positive growth over the years.

Q: What is the take rate, and why is it a concern for PayPal?

The take rate is the ratio of revenue to total payment volume. PayPal's take rate has gradually declined, which raises concerns about maintaining revenue growth if total payment volume doesn't increase at a sufficient rate.

Summary & Key Takeaways

• PayPal's business includes various brands, such as Venmo and Honey, focused on facilitating transactions and moving money.

• The company has seen a decline in stock price but shows positive trends in active accounts and total payment volume.

• Growth numbers for active users and total payment volume have been generally positive, although recent trends show some slowdown.