PayPal really does seem to have been hit first by a long overdue reality check, which brought the share price down to below $100, followed by a wave of negative sentiment unrelated to reality, which pushed the share price down to today's values. Personally, I have been buying steadily since late last year, and now have a large holding with an average buy price of $70.52. Rather than panic that the price is now $8 below my average, I just bought some more shares today, pushing my average down more. Maybe time will prove me wrong, but as Chuck has shown in his analysis, if we push sentiment to the side and look at the numbers, it seems like a great investment right now.
Chuck, thanks for your excellent content! Talking of risk: What is your view on money management - my average price is 103, but the position is unfortunately pretty large compared to my other holdings. And I burned my fingers already once with wirecard, so I am reluctant to average further down...
@@tommyz0123 If the drop is based on bad metrics of the company perhaps. But if you think it is a good buy at a reasonable price and the price drops even more it is logical to buy more. Mr. Market is selling for a good price ;-)
Thanks Chuck. Great video really informative and backs up my thesis on Paypal. Just started buying at $63 and will add more. Paypal has a great brand and opportunity to grow into more buy now pay later options. Your video backs up my thoughts
Great brand? Guess which company is number one on list of the most hated internet companies in US? Yeah its Paypal. It has one of the worst brands and worst reputation of US companies. I know it from my own experience how bad company it is and how overpriced services it offers. And there is no better research according to Lynch than your own experience with the business.
agree. paypal is just fairly priced now. not cheap at all. META once droped to 8-9x PE, no reason, paypal can't drop another 50%. Only at that point, I would call paypal cheap
Thank you, Chuck I had small amount Pypl @ ~ 70/sh. With your comments, I am going to add the same amount of pypl, hoping to bring the average purchase price down. Also I added shares on MPW which I already have a good amount. Thank you again for the great advices.
I bought my first share about half-way down that huge drop, but have been buying more. I just knew it was a great name, but now I worry that it's moat is diminishing.
There is some competition indeed. And the fact that it is taking so long to find a new CEO is making people hold back on buying I think. Once they find a new CEO that gives confidence the Stock might move up quick again.
with ebay dropping paypal and other digital payment apps creating competition I'd like to know how they plan to grow more in the future. Personally I have used paypal for over a decade and found it to be a good product, but today I seem to be an anomaly as few of the others I work with that are younger gens use the product. I will keep an eye on it, but expect it to drop more.
Here are couple from MorningStar: "Longer term, we see a mix of competitive opportunities and threats that create a fairly wide range of outcomes. PayPal remains a somewhat unique player within the payments space. We think this remains its key strength, but its position on both the merchant and consumer side could be challenged over the long run. Traditional point-of-sale acquirers are building out their online capabilities, and, in our view, it is notable that the commonality in the wave of M&A in 2019 was the combination of acquirer and issuer operations. This suggests to us that competitors are interested in replicating the PayPal model. Fintech innovation also appears to be concentrated in the e-commerce space, which has given rise to some new competitors. On the consumer side, services such as Apple Pay represent competition for PayPal. Competition on both sides could chip away at PayPal’s position. On the other hand, PayPal remains a preferred partner in the online space, and could leverage this into a growing presence in point-of-sale transactions. In balance, we think the company can hold its own, but we recognize the potential to veer in either direction. An additional attraction is Venmo. Efforts to monetize the platform are in still in the early stages and Venmo will likely not be a major driver anytime soon. While its long-term future is difficult to predict, we believe it has the potential to create upside above our current fair value estimate."
@trance1986 I was told in the $200s I was crazy not to buy it, lol. Now it's actually undervalued. I'll start my position. I'll dca until it hits overvalued again and let it ride.
I tell you what. I take the Buffet approach. I only buy what I like and use. I HATE F'ING PAYPAL. When I had an issue with a scammer, they took the scammer's side.
Thank you for doing these educational vidios. They are well worth the time to watch . I waa just wondering if there is a lot of pressure on future growth as other payment apps..Like applepay . googlepay and amazon pay along with a few others will be steadily eating into paypals market share. What are your thoughts on this??.. I think paypal will be around for a while but am nervouse about its future with the other giants of tech entering this field. I did buy paypal on its drop of 10% recently thinking it does have a mirgin of safety at this piont and I would strongly look at adding as it goes down. However I am concerned about the longer term future. Again thank you for the edjutainment.
Yeah Morningstar gave it fair value $160 if not more just a year or so ago. They expected high valuationg going forever which did not happen. @@FASTgraphs
For me Paypal is not a purchase because the business model competes with FED and there are too many uncertainties in digital payment. There are good opportunities in the reit sector and utilities right now. Could you please do videos on this? I love your videos Thanks and best regards
I don't think FEDNOW is going to really be a retail option. And even if it were would you want your bank account exposed directly to a hack or lock down. Not me. I use paypal and I don't have my bank account linked. Sort of a stop limit if something were to go bad.
Obviously you did not bite at fair value, because it's the 1st time it has been available at fair value. Valuation matters and it matters a lot. You might try watching the video again and paying attention to what it's showing. Regards, Chuck
Yes it was early covid when the stock market made no sense. And early in my trading career. Rookie error. Regardless I can't cost down since I have a full position. Just one of my rules. I have many winners to offset it so I will just wait. I understood your video very well. I watch them all.
Good video but... Paypal is the type of companies which might not exist anymore in 10 years as it might be annihilated by competition. You can do as many value analyses as you want, show a dozen nice colored lines, if the moat disappears and the competition becomes as strong as it is today in this sector, the company is at jeopardy. Remember my words: in 10 years you won't see the ticker PYPL anymore...
Could be true because it could be acquired by then, or even merged with another. But aren't you going out a little too far with your forecast (speculation)?
Here is the thing.. companies in this size usually expend to other fields, not putting all eggs on one basket. You could be right, but with that kind of market cup?, I am sure they will diversify
With all due respect you looking at TTM trailing 12 month earnings. More current earnings (blended - past, present and little bit of future estimate - PYPL is only trading at around 13 times earnings. Nevertheless, I do agree that it is fairly valued and not tremendously undervalued. Regards, Chuck
I don't like "buy the dip" because it focuses you on getting excited that the price has dropped, even if the value has dropped even more. You should buy when the price is sufficiently below the value to make it compelling.
Why won't Apple Pay eat PayPal's lunch and therefore see the stock go nowhere over the next 5 years. Apple's ecosystem and loyalty can't be underestimated. That's what bothers me. Your analytics doesn't calculate the Apple attack.
You are right about the Apple Crowd. It is like a cult. Then again I haven't really owned anything apple ever. They do have good quality but everyone else has caught up. Not worth the premium. I would argue that a lot of the Apple crowd probably doesn't use Paypal anyways. I'm not too concerned about Apple. I'm more concerned about E-commerce oligopolies. They will do the fee collections themselves to keep costs down. Amazon already dominates. Walmart is growing. Ebay is treading water I suspect mainly because they have abused their sellers for so long. Paypal's corporate culture isn't much different and I know as someone that uses Paypal for my e-commerce that they aren't much help ever. And their position will always be whatever position is most expedient for them. They are very heavy handed and deaf. This is why I'm glad new management will be coming to Paypal. It really is time for some fresh blood. I just hope the new team is better and not worse.
Analyst see growth going forward. Here is MorningStar state take: "On the consumer side, services such as Apple Pay represent competition for PayPal. Competition on both sides could chip away at PayPal’s position. On the other hand, PayPal remains a preferred partner in the online space, and could leverage this into a growing presence in point-of-sale transactions. In balance, we think the company can hold its own, but we recognize the potential to veer in either direction." Regards, Chuck
PayPal was primarily ridiculously overvalued which is the biggest problem that the stock price faced. That is clearly shown in the video by the FAST Graph
Big thumb down for announced raise of price for Fastgraphs. First paid addons than screens only for premium users and now price raise on top of that. Not good development.
for starters, current subscribers are grandfathered in at the old price. 2nd of all we remain 1 of the best bargains for stock research on Wall Street. 3rd,do you have any idea what it costs to produce a tool like this in terms of the pricing data, developers, support staff, servers etc. this is a business, and I resent your comment considering how we created such an affordable research tool to help investors. Regards, Chuck
I dont like double pricing. If you want double pricing than offer lower prices for us who live outside of US and dont have salary like Americans. A normal practise for businesses. Simply Safe Dividends is also a business but offering the same price guarantee forever and they increase their profit by getting more subscribers not by milking them more. What about creating refferal program so I will not bring new people (dozens) to your tool for free and got rewarded by getting nothing in return and even get raised the price? If you raise the price I will not bring any new customers to you for free untli there is some refferal program as all is only about money it seems.@@FASTgraphs
Fantastic analysis. I made a quick swing trade last year and kept it on my watch list. Just grabbed a full position today after watching this compelling argument. Literally the only stock I've bought this year - sold 50% of equities a few weeks ago and went into short term treasuries. Not usually a market timer, but after the nice run, coupled with the most attractive risk-free rates in decades, hard not to take a risk-free 5+%
I agree. I used to do something similar by hand and this just makes screening stocks so fast. I only have the basic edition of it but man it really saves me a ton of time. I mean just being able to see the free cash flow yield instantly is a huge help. Just that one little thing.
Excellent video. I missed it until just now. Everything changed 2 years ago when I saw the chart over your shoulder in the first video I saw of yours. I got it immediately. The price line is meaningless without the context of Earnings growth. It's so clear now. I don't know why it doesn't click immediately for most people. Thanks for the many clear lessons.
Good advice.. thanks.. I bought Paypal between 63-65, several lots.. I was not sure if I should put more money but thus video .. helped me to make the deciesion. At this time it is below 60 and it looks a very stable around 60.
you legit look like my grandfather wo died a few years ago ... would be great if i could watch your videos with him (and translate it in german) ... GREAT VIDEOS ty for that
You would know if instead of settings button we had all implemented directly and visibly into Fastgraphs like button to swith between dividends reinvested and not reinvested directly on Performance tab or a field to put cutom P/E directly under the Graph key area. It takes few minutes to implement but it is not paid addon so it has zero importance to make the tool easier to use. Yet Im asking for that function for months and nothing happened. Even its just adding a one button and it would take me 10 minutes max to implement it.
Great Video and very timely for me. I did pretty much the same analysis and have been on the fence of getting in but your comments and video give me the confidence.
Been sitting on a loss for some time. Stock has hardly moved in 2 years. Tons of tech stocks advanced while pypl did nothing. What is going to be the catalyst to propel this stock?
It depends what you mean by propel. If you mean shoot back up to $300, then probably nothing will make it do that, unless the market goes completely irrational again. If you mean slowly increase up to $100, then faith in market fundamentals and a bit of patience for a few years is all you need.
Its been undervalued for awhile but just sits in a range despite other fintech stocks moving. Just dont know what would push it forward. I dont expect a meteoric rise but am hoping for at least at 10-20% gain. I will hold and see but am reluctant to add until it has a breakout
PYPL was not the only stock that was overvalued. I am pretty sure TSLA and NVDA are overvalued too but they are resilient. PYPL needs new blood CEO to deliver a better future and projection. Something innovative.. hope the stablecpin would pump it on the next crypto bull.
I'm afraid Paypal is now trading at fair value, which in November 2023 is 50. It will most likely go to 44 before any recovery. Fair? Mr. Market sets the price.
Love your content Chuck. Perhaps you could take a look at Tecnoglass stock in your next video? I find the current developments in their stockprice and earnings fascinating.
TGLS looks like an undervalued growth at a reasonable price dividend growth stock. However, further research and due diligence would be required. Regards, Chuck
Here is an overview from Zacks: "Overview As of 08/09/2023, PYPL's historical and estimated annual EPS: EPS was $2.42 in 2018, $3.1 in 2019, $3.88 in 2020, $4.6 in 2021 and $4.13 in 2022; the consensus EPS estimate is $4.95 for 2023 and $5.53 for 2024. As of 08/09/2023, PYPL's historical and estimated annual sales: Sales was $15,451.00 million in 2018, $17,772.00 million in 2019, $21,454.00 million in 2020, $25,371.00 million in 2021 and $27,518.00 million in 2022; the consensus sales estimate is $29,105.40 million for 2023 and $31,051.00 million for 2024. As of 07/17/2023 PayPal has emerged as one of the largest online payment solutions providers on the back of its strong product portfolio and two-sided platform that enables it to offer smooth and secure transaction facility to both customers and merchants. The company’s peer-to-peer payment service, Venmo, is the key catalyst behind the solid growth in its total payment volume (TPV). Venmo is driving the active accounts base of the company with the aid of strong monetization efforts and robust features. Moreover, PayPal poses a serious challenge to Square’s growing presence in the online payment space on growing adoption of Venmo. Further, the company offers domestic and international person-to-person payment facilities with the help of PayPal and Xoom products. One Touch, which has emerged as the key growth driver behind PayPal’s accelerating mobile volumes owing to its robust mobile checkout services, is contributing to the merchant and customer base further. With the aid of these robust products, PayPal continues to gain solid traction in the global online payment market. It allows customers to send payments in more than 200 markets globally. It has connections with financial service providers worldwide. Further, the company supports withdrawal of funds from bank accounts in 56 currencies and holding balances in PayPal accounts in 25 currencies. Additionally, transfer of funds supports more than 100 currencies globally. Additionally, this San Jose, CA-based company is gaining from strategic acquisitions including Hyperwallet, Braintree and iZettle that are helping it in delivering better payment experience. Furthermore, PayPal’s growing banking initiatives remain noteworthy. Instant Transfer to bank allows U.S. customers to transfer money to their bank accounts seamlessly within 30 minutes on the back of the company’s partnership with JPMorgan Chase. In 2022, PayPal generated revenues of $27.52 billion. It earns revenues from transactions and other value-added services that accounted for 91.6% and 8.4%, respectively, of 2022 revenues." Regards, Chuck
Oh, Lord. PayPal is the biggest loser in my portfolio. I've bought the price down to $108.00 per share but I do not see Paypal ever seeing $90.00 again.
Unfortunately your cost basis is too high the stock is just become fairly valued for the 1st time at about $60 a share. I tried to clearly point that out the video, PayPal has been overvalued since it went public until now. Regards, Chuck
This is more for other people to see , for people saying there is newer competition; paypal is still dominant in countries outside US, as some of the new options are not available, also it seems to me paypal has higher retention in older audience somwhat like facebook (compared to the newer options). I get a lot of sentiment that its still relevant as ove seen alot of videos where people say they are setting up paypal accounts for their parents because its simple conpared to other audiences Also, seems to me they are trying to appeal to yoinger audiences with the stable coin, which may have some impact if the dollar loses value I personally will likely invest if it hits near 50
Paypal is high in RU-vid Charts. This Trend :). I only buy value and Great Stocks. Valuation matteres 👍. Thank you for Sharing. Sry my english Not well.
If PP keeps putting accounts on hold, and withholding funds, people will not use their services, hence why stock prices are down and will likely stay down.
@@danielfchen8895I agree with you that is not the main issue but they did piss off or annoy customers by freezing accounts. They need to remain focus on growing the business and not get into woke politics. It's my reason why I initially sold my position.
The big risk is simply more payment button competition. Apple Pay is now a thing I guess. And the apple crowd for whatever reason is sort of like a cult. I personally don't get it. But if they like overpaying for all their gear so be it. Also I think as Amazon has stolen more of the online market share. One thing I think they should do or be willing to do is to go to some large companies like Walmart and give them a freaking sweetheart deal just to get Paypal button as an option on their website. Heck maybe even provide the paypal service to Walmart at costs. They need to get ruthless and make sure their payment option is available at as many places as possible.
Growth stocks hate high interest rates. Right now the market has priced in a soft landing, but energy is currently on the move back up. With rates not falling for the foreseeable future, and with the potential for inflation to rise again, this stock could go lower. My bigger concern is that fintech is crowded and they reported a loss, albeit small, in customers. There’d to announce a new CEO and get those customers back before the market rewards them.
The problem with overvaluation and all it took was catalyst to bring a stock to reality. Everybody loved it when it is expensive and now they hate it when its reasonable go figure
MPW Chuck, do a repost on that stock. You gave a high expectation on the stock before, honestly without adressing the issues really. Now after results it would be good to see you to re emphasize on that stock, now including the obvious worries. Appreciate your post on paypal though, but given your efforts on MP I really expected you to update this one, prior to anything else.
My position that MPW has not changed. The recent market reaction was significantly overnight in my opinion fundamentals remain as expected. The real answer will be known on the next 3 to 5 years or longer. Regards, Chuck
I sold and took my profits after the drop. 16% total return in a few months isn't bad. The last earnings report just unnerved me. Way too many one time this and one time that. I don't care for how they are instead of collecting rents they are taking stock in one case or extending credit in another case. The basic premise is that they can't lose because hospitals are needed. But if they are so strong why do what they are doing. It just shows a lot of weakness. They seem to have most of their immediate problems behind them now. But a big liquidity crunch comes in 2025 if they don't start building up the balance sheet. I'm waiting for the dividend cut and then I'll buy in. I prefer holding for the long term but they really do need to shore up the balance sheet. Also in 2025 it is going to be a lot harder to refinance if they wait that long. Saw an article the other day talking about how a trillion dollars of corporate debt is going to be refinanced in 2025. So I'd like to see MPW management bite the bullet and protect the company versus the "hope things work out plan". I actually think if they cut the dividend the stock goes up from there. Cause it says they aren't going to risk having to sell off assets to pay debts. That clearly would weekend the company portfolio because nobody is going to want the distressed properties. This is just my opinion. I only had a starter position.
