PayPal: Earnings Are Mixed, Stock Is Still Very Cheap

2025-05-01 00:09:22 ET

Summary

• PayPal is trading near a FWD PEG ratio of 1 when looking at 2026 earnings expectations.
• PayPal trades below long-term growth rates in earnings, revenue, and free cash flow.
• Q1 earnings showed amazing growth in margin expansion and profitability, but revenue growth being only 1% is still the one black eye.
• Even when backing out share-based comp, PayPal has a free cash flow yield of over 8%, cheap in any sector.
• The balance sheet is also rock solid, with more cash than long-term debt and long-term debt less than 1.5 X EBITDA.

Still cheap, still unloved

Every time I return to PayPal (PYPL) as an investment idea, the stock has gone through a rise and then a fallback down to around this level in the $60s. I started buying and writing about PayPal right around the winter of 2023 . The company had just transitioned to a new, younger CEO in Alex Chriss and was trading around the $58/share mark....

Read the full article on Seeking Alpha

For further details see: