Here are some reasons why PayPal now at its current price and forward PE of 12 gives it a high growth potential as an investment:
Strong growth: PayPal has been growing its earnings at a compound annual growth rate (CAGR) of 20% over the past five years. This growth is expected to continue in the future, as the company continues to expand its reach into new markets and add new products and services. Large addressable market: The global digital payments market is expected to grow from $3.5 trillion in 2021 to $7.4 trillion by 2025. PayPal is well-positioned to capture a significant share of this growth, as it is one of the leading global digital payments providers. Strong competitive position: PayPal has a strong competitive position in the global digital payments market. The company has a large and growing user base, a strong brand, and a wide range of products and services. Attractive valuation: PayPal is currently trading at a forward PE of 12. This is below the average PE for the S&P 500, which is currently trading at a forward PE of 17. This suggests that PayPal is undervalued, and that it could offer investors attractive returns in the future. Overall, PayPal is a well-positioned company with strong growth potential. The company is expected to continue to grow its earnings at a rapid pace in the future, and it is well-positioned to capture a significant share of the growing global digital payments market. As a result, PayPal could offer investors attractive returns in the long term.
However, it is important to note that there are some risks associated with investing in PayPal. These risks include:
Competition: PayPal faces competition from other global digital payments providers, such as Visa and Mastercard. Regulation: PayPal is subject to regulation in the countries in which it operates. Changes in regulation could impact the company's business. Economic downturn: A global economic downturn could lead to a decline in consumer spending, which could impact PayPal's business. Investors should carefully consider these risks before investing in PayPal.
Thanks for sharing your idea! IMHO, PayPal has probably done some things wrong in the past, otherwise the share price would not have plummeted as it has. Assuming the cyclical catch-up movement and price correction, the price in the future could be $624.54 on 12/10/2026, for example. ...or not, who knows what will happen in 3 years, a lot can happen with PayPal, but this assumption is the most plausible at the moment.
optionfarmers
⋅
@ReallyMe, thanks for adding to the conversation. yeah who know, "knowing" is not the wealth build, but learning is! I was bearish on it as a payment platform until I dug in. the growth engine is their unbranded services now, braintree. seems like they know competition is heating up for payment services choices so they are focusing on the back end.
ReallyMe
⋅
@optionfarmers, gladly! yes, absolutely, I use PayPal myself and I like it and I'm in Central Europe on the other side of the globe so the payment service has done something and done it right and risen to be the global leader. I think the next rise is coming, because what's good wins out. PayPal has strong cards to position itself well in the backend business as well.
optionfarmers
⋅
@ReallyMe, i was research apple/iphone market share vs andoid, and in usa apple is big, but in rest of world it is not as big. so the apple pay is there but not end all for all payment forms.
ReallyMe
⋅
@optionfarmers, google pay and apple pay is what most young people use in my country, also using the smartwatches at gas stations and such... after that comes nothing for a long time, then of course the traditional credit cards and the european ec & maestro cards.
optionfarmers
⋅
@ReallyMe, venmo i hear thrown around in normal chats all the time.
ReallyMe
⋅
@optionfarmers, may well be an up-and-comer like that right now, but not here in my counties. probably more like a US rising competitor.
...or not, who knows what will happen in 3 years, a lot can happen with PayPal, but this assumption is the most plausible at the moment.