February 8, 2025
PayPal: A Potential Value Trap (NASDAQ:PYPL)

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Justin Sullivan

Thesis

Despite the low valuation, we don’t believe PayPal (NASDAQ:PYPL) represents a buying opportunity at this time. The Company faces increased competition in its core lines of business and will likely see reduced revenue growth and/or decreased margins as a result. Payments is a tough business with moats difficult to maintain and management has made a series of questionable acquisitions and policy decisions. Add to this the fact that a leading active investor has exited his position only a year after taking it, despite a steady decline in the share price. While PayPal could become a great investment opportunity at these prices, it could also become a value trap that underperforms the S&P 500.

Data by YCharts

Data by YCharts

Data by YCharts

Source: seekingalpha.com

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