Is PayPal Stock A Good Long-Term Investment? Why I Finally Bought The Stock

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PayPal (PYPL) stock has been crushed since releasing fourth quarter earnings, continuing a slide that has left the stock trading at a fraction of where it was trading only several months ago. The company guided for a steep slowdown in growth in 2022, but growth is expected to accelerate as it moves beyond struggles related to eBay (NASDAQ:EBAY). The company is buying back stock and with the valuation at a low 24x earnings, the share repurchase program may play an increasingly important role moving forward. I rate the stock a strong buy as I have finally purchased the stock myself for my portfolio.

How Did PYPL Stock Do In 2021?

PYPL started 2021 with strength, at one point trading up 30% for the year. The stock tumbled as it closed the year, and continued falling. The stock is now down over 60% from recent highs:

Chart

YCharts

The tumble appears to be due to conservative guidance for 2022, but with the stock trading at 24x earnings, it is worth buying here.

What Is PayPal Stock’s Price Target?

In spite of the steep fall, Wall Street analysts remain optimistic for the stock’s forward prospects. The average rating is 4.27 out of 5, a solid buy rating.

Wall Street PayPal Ratings

Seeking Alpha

The average price target is $182.54, representing a 60% potential upside.

PayPal Price Target

Seeking Alpha

It is unusual for the consensus price target to represent so much upside for a high-quality stock like PYPL which is flowing cash with solid growth ahead of it. Let’s dig deeper to understand why the stock has fallen but more importantly, why I see great upside ahead.

PYPL Stock Key Metrics

PYPL continued to grow its active accounts base, albeit at a decelerating rate.

PayPal Active Accounts

PayPal 2021 Q4 Presentation

The company expects further pressures as

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PayPal Stock Plunges As E-Commerce Firm Shifts Absent From Purchaser Expansion

PayPal Holdings (PYPL) stunned Wall Avenue with direction that poorly missed sights and new strategic aims when it claimed fourth-quarter earnings. PayPal stock plunged Wednesday.




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San Jose, Calif.-centered PayPal documented December-quarter earnings late Tuesday. Earnings and total payment volume came in underneath analyst estimates.

PayPal 2022 financial gain guidance and its outlook for customer advancement missed as effectively. In addition, PayPal deserted 5-12 months monetary targets.

PYPL stock plunged 24.6% to near at 132.57 on the inventory current market today.

PayPal expects to include 15 million to 20 million web new active regular users in 2022, missing street estimates of 53 million.

In 2021, PayPal extra 45.7 million energetic end users organically. It ended the yr with 426 million lively people, up 13% from a yr earlier.

Meanwhile, PayPal administration shocked the Wall Road analysts with a new aim on the earnings connect with, reported Lisa Ellis, analyst at MoffettNathanson in a report.

PYPL Inventory: Level of competition Heats Up

“The shocker: management abruptly shifted its concentrate from driving consumer growth to driving ARPU (normal income for each person) growth, abandoned its 2025 intention of 750 million people, and will focus rather on growing engagement among the the on-3rd of PayPal customers that push the extensive the greater part of the firm’s revenues,” Ellis claimed.

PayPal has evolved from on the internet checkout to cellular buying and particular person-to-man or woman payments. Competitors has heated up with Block (SQ), previously referred to as Sq., and other folks.

At Susquehanna, analyst James Friedman reported: “PayPal is pivoting its method to concentration more on engagement, but less on net new actives. The new technique seems practical to us as numerous of the new accounts proved less productive.”

PayPal has aimed to create a monetary “tremendous-App” for shoppers.

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$100M from PayPal and Carlyle – TechCrunch

The e-commerce increase that started with the COVID-19 pandemic reveals little indicator of slowing down, and right now a company identified as Shopware, which provides a set of open up resource equipment to power on the net searching ordeals for some 100,000 mid-sized and bigger makes, is announcing $100 million in funding to seize the option.

The money is notable not just for its nine-figure dimension, but also since of its context. This is the to start with outside funding that Shopware has ever lifted — it has been bootstrapped and rewarding because remaining founded back in 2000, when e-commerce was seriously only having its get started — and it’s coming in aspect from a massive strategic backer: the payments behemoth PayPal and Carlyle (by way of its Carlyle Europe Engineering Partners fund) are its two first exterior buyers.

“This funding will assist us supercharge our worldwide expansion – enabling Shopware to seize the sizeable opportunities forward of us,” explained Stefan Hamann, co-CEO of Shopware, in a assertion. “As a enterprise, we are happy to have been lucrative from working day a single, and are fired up to function carefully together with Carlyle and PayPal to establish on Shopware’s positioning in the prolonged phrase.”

Shopware is not disclosing its valuation but notes that Carlyle and PayPal are coming on as minority traders. Sebastian and Stefan Hamann — the brothers who co-founded Shopware in the modest (inhabitants: all over 7,000) city of Schöppingen in the northwest of Germany in close proximity to the Dutch border — will retain a important the greater part stake in Shopware, the firm claimed in a assertion. They will also remain on as co-CEOs.

Shopware’s sweet spot up to now has been serving mid-market place businesses and brands that are not always digitally-indigenous firms but

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