Why PayPal Stock Is a Buy Before Feb. 3
Sunday, Jan 19, 2025 6:02 am ET
3min read PayPal Holdings, Inc. (PYPL) has been on a rollercoaster ride in recent years, with its stock price plummeting from its all-time high in 2021. However, the company's recent performance and strategic changes suggest that it might be time for investors to consider buying PayPal stock before Feb. 3. Here's why:
1. Undervalued Stock: PayPal's stock is currently trading at a significant discount compared to its historical valuation. As of Jan. 19, 2025, PayPal's stock price was $86.86, which is far below its all-time high of $308.53 in 2021. This undervaluation presents an opportunity for investors to buy the stock at a relatively low price.
2. Strong Analyst Ratings: The average analyst rating for PayPal stock from 34 stock analysts is "Buy," indicating that analysts believe this stock is likely to outperform the market over the next twelve months. This positive sentiment from analysts suggests that PayPal's stock may have long-term growth potential.
3. Growing Revenue and Earnings: PayPal's revenue and earnings have been steadily increasing over the past few years. In 2023, PayPal's revenue was $29.61 billion, up from $27.50 billion in 2022. Similarly, PayPal's net income was $5.52 billion in 2023, up from $4.72 billion in 2022. This growth in revenue and earnings indicates that PayPal's business is strong and continues to expand.
4. Expanding User Base: PayPal's user base has been growing consistently over the years. As of Q2 2024, PayPal had 429 million active accounts, up from 84.3 million in Q1 2010. This growth in users directly contributes to PayPal's revenue growth as more users mean more transactions and higher transaction volumes.
5. Innovation and Expansion: PayPal has been expanding its services and entering new markets, both domestically and internationally. This expansion allows PayPal to tap into new revenue streams and increase its overall revenue. For example, PayPal's entry into the cryptocurrency market and its acquisition of iZettle have contributed to its revenue growth.
6. New Leadership: PayPal recently appointed Alex Chriss as its new CEO, who is leading the charge to reverse the recent weakness in the company's profit margins and boost earnings. Chriss is focused on making PayPal leaner and more focused, with new initiatives aimed at stemming the decline in profit margins and boosting earnings.
In conclusion, PayPal's undervalued stock, strong analyst ratings, growing revenue and earnings, expanding user base, innovation and expansion, and new leadership make it an attractive investment opportunity before Feb. 3. While there are still challenges ahead, PayPal's strategic changes and growth potential suggest that the company is well-positioned to recover and outperform the market in the long run. As always, investors should conduct their own research and consider their risk tolerance before making any investment decisions.
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