Main financial assets discussed: PayPal (NASDAQ: PYPL) stock
Top 3 key points:
1. While PayPal's growth has slowed down, its earnings per share (EPS) is growing at double digits, total payment volume (TPV) growth is accelerating, unbranded processing is gaining traction, and operating margins continue to expand.
2. Transaction revenue growth is driven by an increase in TPV and the growth of Braintree, offset by a slowdown in PayPal's core products and services.
3. PayPal's take rates and margins are declining due to the growth of unbranded processing, but the company is focused on improving monetization and introducing higher-margin services.
Recommended actions: **Buy**. The article suggests that PayPal is still a high-quality business capable of consistent growth. The stock is trading at a low valuation, and there is potential for upside as the company improves margins and returns to growth.
The article mentions PayPal (NASDAQ:PYPL) stock. The author's suggestion is to buy PayPal stock as they believe it is a high-quality business capable of consistent growth. The author highlights that while PayPal's growth has slowed down, its earnings per share (EPS) is growing at double digits, total payment volume (TPV) growth is accelerating, unbranded processing is gaining traction, operating margins are expanding, and the company is aggressively buying back shares. The author also discusses the main takeaways from PayPal's Q2 results, including revenue growth, TPV growth, declining take rates, and declining active accounts. The author analyzes PayPal's profitability, financial health, and valuation. The author concludes that PayPal is trading at a large margin of safety and has the potential for significant upside.
Main financial assets discussed: PayPal (PYPL) stock
Top 3 key points:
1. PayPal's stock is currently trading at multi-year lows, with the RSI indicating oversold conditions and technical indicators suggesting potential momentum and sentiment improvement.
2. Despite a temporary slowdown and market overreaction to the economic slowdown, PayPal is expected to continue growing revenues and profitability in the future. The company could also see a management shakeup and cost-cutting measures to improve margins.
3. From a valuation perspective, PayPal is considered dirt cheap, trading at a low forward P/E multiple. Consensus estimates and higher-end projections suggest significant upside potential for the stock price.
Recommended actions: **Buy**
Main topic: PayPal launches its own stablecoin, PayPal USD, pegged to the US dollar.
Key points:
1. PayPal USD is backed by US dollar deposits, short-term US Treasuries, and similar cash equivalents.
2. The stablecoin is issued on the Ethereum blockchain by the Paxos Trust Company, regulated by the New York State Department of Financial Services.
3. Users can buy, sell, send, and use PayPal USD for payments, as well as transfer it to external wallets or convert other cryptocurrencies.
PayPal has launched its own stablecoin called PayPal USD (PYUSD) in the United States, aiming to eliminate price volatility in digital currencies and facilitate confident payments, despite unclear regulatory guidelines for digital assets in the country. PayPal's large user base and market share in online payment processing could significantly impact stablecoin adoption. However, there are potential advantages and disadvantages associated with PYUSD, including its potential to onboard mainstream users to the digital economy and the lack of regulatory clarity in the US.
PayPal's stock has been struggling, but the author believes that the company is still in a favorable environment, with healthy metrics and valuations, and has the potential for future growth, particularly through its Venmo platform.
This article mentions the stock of PayPal (PYPL). The author's recommendation is to buy PayPal stock. The author's core argument is that PayPal is undervalued and has strong growth prospects. The key information and data provided include PayPal's historical stock performance, its acquisitions, the management team, its free cash flow, its competition in the buy now, pay later (BNPL) market, recent financial results, and industry comparisons.
Coinbase has announced its plans to list PayPal's stablecoin, PYUSD, becoming the second major U.S.-based exchange to embrace the digital asset and signaling the rapid mainstream acceptance of the stablecoin.
Tether (USDT) is the world's largest stablecoin with over $66 billion in market capitalization, despite controversies surrounding its collateral and reserve holdings.
Paxos has released a transparency report confirming that its Ethereum-based stablecoin, PayPal USD (PYUSD), is fully backed by assets, with total tokens outstanding amounting to $44.4 million held in custody, primarily in U.S. Treasury reverse repurchase agreements.
PayPal's stablecoin ambitions are driven by potential savings on multicurrency transactions, but Tether co-founder William Quigley believes it is unlikely to bring much innovation and may primarily serve as a cost-saving measure for PayPal. Quigley explains that stablecoins allow PayPal to bypass financial intermediaries, conduct transactions on its private blockchain, and eliminate fees associated with currency conversions. He also highlights the potential profits that stablecoin operators can earn from interest-rate increases.
PayPal's stablecoin, PayPal USD (PYUSD), is now available for purchase on Venmo, allowing users to buy the cryptocurrency and marking the first instance of wallet interoperability with no costs between PayPal and Venmo.
A new report by the Federal Reserve Banks of Boston and New York concludes that stablecoins, such as Tether and USD Coin, have similar vulnerabilities as money market funds and could potentially inject instability into the broader financial system.
PayPal's stablecoin, backed by the US dollar, has become available on the Crypto.com exchange, which now holds the deepest liquidity for trading pairs with the PayPal USD (PYUSD) stablecoin globally.
The article discusses the stock of PayPal Holdings (NASDAQ: PYPL). The author gives the recommendation to buy PayPal stock, stating that its underperformance provides a compelling investment opportunity.
The author's core argument is that PayPal's long track record of growth and strong business performance will cause the stock to rebound over the medium to long term.
The key information and data provided include:
- PayPal's net revenues grew by 8% in the first half of the year, and operating income grew by 45%.
- Total Payment Volume (TPV) grew by 10% in the first six months of the year.
- The growth rate of active accounts has slowed down, but the number of payment transactions is still increasing.
- PayPal announced a partnership with KKR to sell up to $42 billion in BNPL receivables in Europe, which is seen as a positive move.
- PayPal's balance sheet carries approximately $10.6 billion of debt, but it has a significant cash position and consistent free cash flow generation.
- PayPal's enterprise value is calculated at around $64.9 billion.
- The article mentions the risks of competition, leadership changes, and a slowing rate of inflation for PayPal.
Overall, the author's analysis suggests that PayPal's business performance is strong, and the stock's underperformance presents a buying opportunity.
The total market capitalization of stablecoins, including PayPal's stablecoin, has decreased, indicating a contraction in the digital-asset sector.
