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.
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.
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PayPal's stock declined after MoffettNathanson downgraded the rating, citing expected lackluster gross-profit growth under the new CEO, with Jim Cramer also advising investors to avoid newer fintech names like PayPal and opt for older financials such as Mastercard and Visa.
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Paypal shares have seen a decrease of 6.74% over the last month, and analysts are closely monitoring its performance ahead of the upcoming earnings report.
