The stock is slowly moving up… The stock has moved up to the resistance level.
Those who have a long-term view, should start looking deeper in this name. The turnarounds take time, the company is still working on their products, the new strategy of ad’s is unproven, competition from Apple pay and others are intense…
Having said all of that, the guidance is conservative.
My expectation is they can do $4 EPS at 15x it is $60. If they can continue to grow at 10%, what kind of multiple you will assign?
Separately, in the last 12 months they have purchased 81 million shares at $63 a piece for $5.1 B. They will still make $5 B + in FCF, that means they can continue to buyback.
The way I see is, the stock is cheap, the downside is limited and there is some upside potential.
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You can see Visa, Mastercard are virtual #1,2 in most countries but it is important to see PayPal across the America’s and Europe. In general you can see PayPal hasn’t managed to penetrate in Asia.
You will be surprised that the main reason behind this is PayPal focused mostly on English and Spanish interfaces!!!
Separately, in India the first 4 companies are Indian firms.
UPI - 260 M
Rupay - 64 M
Paytm - 72 M
Phonepe - 500 M
Google Pay - 70M
Paytm numbers are under reported, and central bank had taken some actions against their banking operations.
Ha! I completely missed the CFO talked about $5 B buyback in early Feb and now the CEO modified it as at least $5 B. On $70B market cap that is like reducing 7% of outstanding shares… even accounting for dilution, they should be able to reduce 5%. The share buyback alone should boost the EPS by mid single digit.
When you are bored, do a covered call!!! I did a covered call for $62.5 Strike expiring June 18 2026 for a net price of $46. The expiry is 735 days away, or 23 months. If the stock is above $62.5, you make 17.8% CAGR. It is just one contract. This gives plenty of time for PYPL restructuring, product positioning, etc.
I did this in IRA as a 2 year income play. You can do this in taxable account too. If the stock has really moved up, you can buy back the option which will be short-term profit/ loss and the stock can be long-term profit/loss.
This is how when the valuation catches up to fundamental looks like…
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Bank of America Chartist presents a case for bearish stock price movement. Importantly the stock closed below $60.85, and it declined from $68 to $60.63, almost on no news. If it goes below $60, I might buy some puts. 
