Is Pypl cheap or a value trap

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I have been looking at PYPL and they do seem cheap. They have a new CEO(Alex Chriss) that is trying to turn this beast around. But if you look at a 5 year chart they have crashed.

PayPal’s new CEO promises improvements | Payments Dive.

Paypal does have some great products, Braintree and Venmo, and I do see some green shoots. They are buying back shares and have over 20 billion dollars in Treasury shares on their balance sheet, which has been climbing since Q421, and has gone up over 9 billion in that time frame. Their Sales per share has been growing nicely also with their EPS growing sequentially. They have 15.4 billion in cash and 10.6 billion in debt. Their revenue growth is in the single digits but you can pick this company up for a P/S of 2.44. They have bought back 4.4 billion in stock so far this fiscal year and expect to buy back 5 billion before the fiscal year is through. I don’t this this is a value trap and I do think Chriss can turn this around. What do you all think.

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Andy

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I worry about all the “payment” competition.
There is no moat.

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You wouldn’t consider Venmo to be a small moat? Brand recognition? I am thinking if they can cut all the fat than with all the buybacks they are doing that EPS should really take off.

Andy

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Yes, I think it is a small moat; but just that.
I agree they can get the EPS up, I am not sure for how long.

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Thanks Jaroman, I have just started looking into Paypal so I still have a lot of work to do.

Andy

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