Is PayPal Holdings, Inc. (PYPL) The Best Stock Under $100 To Invest In?

PayPal Holdings, Inc. (PYPL) has been a standout performer in the financial services sector, demonstrating strong revenue growth and profitability. As of November 6, 2024, PayPal's stock price is $81.41, making it an attractive option for investors seeking stocks under $100. But is it the best stock in this price range? Let's explore PayPal's financial performance, strategic initiatives, and competitive advantages to determine if it deserves a place in your portfolio.
PayPal's financial performance has been impressive. In the third quarter of 2024, the company reported a 6% increase in net revenues and an 18% increase in non-GAAP operating income. This growth was driven by a 6% increase in payment transactions and an 8% increase in transaction margin dollars. PayPal's strong financial performance is reflected in its stock price, which has appreciated by 37% over the past year.
PayPal's strategic initiatives have contributed significantly to its financial success. The company is focusing on enhancing mobile checkout experiences, which have demonstrated healthy conversion uplifts in early testing phases. Additionally, PayPal's Braintree platform continues to contribute positively to transaction margin dollar growth. The company's Fastlane initiative aims to capture a significant portion of the e-commerce market not served by button-based solutions, providing a substantial growth opportunity.
Venmo, PayPal's popular peer-to-peer payment app, has also been a significant driver of growth. With over 80 million users, Venmo's strong user base and increasing adoption of monetization features like the Venmo debit card and Pay with Venmo service are fueling PayPal's revenue and profitability. Mizuho recently upgraded its target price on PayPal shares from $90.00 to $100.00, reflecting the company's strong fundamentals and growth prospects.
PayPal's competitive advantage lies in its network effect, which has been established over several years. The company's extensive user base and merchant network create a powerful network effect that enables seamless and convenient payment experiences for both consumers and merchants. PayPal's strong brand recognition, as reflected in its high brand awareness and positive consumer sentiment, further enhances its competitive advantage.
However, PayPal faces regulatory risks and competition that could impact its business model and stock price. Regulatory scrutiny of its fees and practices, such as the recent $95 million fine imposed by the CFPB, could affect PayPal's profitability and share price. Intense competition from established players like Visa and Mastercard, as well as fintech startups, may also erode PayPal's market share and growth prospects.
Despite these challenges, PayPal's strong financial performance, strategic initiatives, and competitive advantages make it a compelling investment option for those seeking stocks under $100. While AI stocks may offer higher returns in the short term, PayPal's stable profits and cash flows make it a more reliable choice for long-term investors, particularly those focused on income generation.

PayPal's stock price has appreciated by 37% over the past year, reflecting the company's strong financial performance and growth prospects.

| Metric | Q3 2024 | Year-over-Year Change | | --- | --- | --- | | Net Revenues | $7.8 billion | +6% | | Non-GAAP Operating Income | $1.5 billion | +18% | | Payment Transactions | 6.6 billion | +6% | | Transaction Margin Dollars | $3.7 billion | +8% | | GAAP EPS | $0.99 | +6% | | Non-GAAP EPS | $1.20 | +22% |
In conclusion, PayPal Holdings, Inc. (PYPL) is a strong contender for the title of the best stock under $100 to invest in. Its impressive financial performance, strategic initiatives, and competitive advantages make it an attractive option for investors seeking stable profits and cash flows. While regulatory risks and competition pose challenges, PayPal's network effect and strong brand recognition position it well for long-term growth and success. As an income-focused investor, PayPal's stable profits and cash flows make it an ideal choice for your portfolio.