📈 PayPal: Future or trap?
PayPal $PYPL+0.6%, once a market darling, is now struggling and has fallen by more than 75 % from its all-time highs.
PayPal
PYPLThe "PayPal Button" - This symbolic checkout makes up about 1/3 of all transactions and brings in up to 2/3 of gross profit. This segment includes standard solutions "Pay with PayPal", which you see in most online checkouts, as well as cross-border transfers. Due to the huge competition from mobile wallets (Google Pay, Apple Pay), it is unfortunately receding.
Braintree, this 2013 acquisition , handles ~$400 billion in volume annually, but faces strong competition from companies like Stripe and Adyen. However, another nasty competition to PayPal is Mastercard $MA+0.3% and Visa $V, people around the world pay using their services .
Other activities - 35 % ofPayPal' s volume comes from subsidiaries like Venmo, Xoom, Hyperwallet, Zettle, Honey and others. Given that its total payment volume has grown at a rate over the last 5 years23,5 % per year, it seems to me that the company is valued relatively cheaply.
Indicator P/E is at a level 17which is low for a company like this. The growth in payment volume indirectly reveals its future. The key will be to maintain PayPal in the market against very strong competition. The future depends on how fast PayPal PayPal adapts to the market and how quickly it is able to innovate and innovate! 🚀
PayPal
PYPLWhat's your view on PayPal, does it strike you as an interesting player at current prices, or will the competition phase it out completely?
I had Pypl but once it got to a price of $68 at the end of March, I sold. It was enough to make me a small profit because I had held the position in the negative for almost a year and while I would have liked to wish them a prosperous future, I didn't want to lock in funds. There is a lot of competition and it's just not what it used to be, although the current CEO is good for me.
Exactly, at the moment the competition is really big, and I'm quite surprised what results $PYPL+0.6% has been able to deliver anyway. I'll take a closer look at it and see what I can do with my position.
Like I'm still a proponent of it going up, but I'd see it only on the horizon for 2-3 years or so. After yesterday and today I also expect declines, the FED cut I think will ultimately be max 1 this year if at all and only after the election to remain sort of impartial because to make any move before, it will be in the vernacular, "one side whining and the other cheering" ...and so I think the markets will react with more declines and I wouldn't see a rise until the end of the year.
...but I actually digressed ... so I decided to sell at a small profit to free up cash for any downturns, where I see faster growth than in $PYPL+0.6%
The price is fine and it's an interesting company, but it's too much speculation for me.
I don't see this as a very long term hold. I just need PE to return to normal, get rid of it and buy a more promising company.
The competition is really big, I'm also waiting to see if he recovers at least a little bit and then sell the position.
The current price may be interesting, but the company will have a hard time in the next few years. They'll have to come up with something new. Its services, which were once unique, are now available to every other bank or Revolut etc. The business is still solid, but I personally don't plan to invest in a company with such low commitment and outlook.