PayPal: Still Not Ready To Checkout


  • PayPal’s Q1 2024 results exceeded expectations, though transaction margin improvements were largely driven by transitory factors.
  • The new CEO is making promising changes to revitalize growth and improve cost discipline, though the success of these initiatives is yet to be seen.
  • Our valuation is based on a gross profit multiple, with a base case target of $67, bull case of $85, and bear case of $51.
  • We maintain our Hold rating due to the limited upside to our base case target price and sustained competitive pressures.

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Our initial report on PayPal Holdings, Inc. (NASDAQ:PYPL) rated the shares a Hold. Despite the stock’s massive correction following a significant e-commerce-fueled rally during COVID, we did not see the valuation as attractive when considering the mounting competitive pressures, slowing

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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