PayPal (PYPL): Assessing Valuation After Executive Stock Sales, Strong Q3, and Strategic Partnership Moves

PayPal Holdings (PYPL) has been in the spotlight after several executives sold more than $1.5 million in company stock. This occurred despite reporting solid Q3 performance and raising its full-year outlook. At the same time, PayPal is making moves to expand its presence in new digital commerce channels through fresh partnerships and a sizable buy-now, pay-later loan deal in Europe.

See our latest analysis for PayPal Holdings.

Despite some headline-grabbing partnerships and robust Q3 results, PayPal’s latest share price of $62.69 marks a tough run, with a 9.5% decline in the past month and a sharp 27.3% drop year-to-date. This is reflected by a one-year total shareholder return of negative 27.6%. While momentum is fading for now, new strategic alliances and the strengthening of its European buy-now, pay-later division suggest growth potential that investors are watching closely.

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With the stock trading at a steep discount to analyst price targets despite consistent earnings growth, investors may wonder if the negativity is overdone or if the market is already accounting for PayPal’s future ambitions. Is this a buying opportunity, or is everything already reflected in the current price?

Most Popular Narrative: 40.4% Undervalued

At $62.69, PayPal trades far below the $105.25 fair value suggested by the current most-followed narrative. This indicates a wide perceived discount. According to Zwfis, this narrative is based on an analysis of PayPal’s revenue streams and recent business model pivots, aiming for sustained long-term growth and profitability.

Venmo is a very popular app or tool that people are using all over. One thing that past management had issues with was how to monetize it. Slowly, besides transaction fees and earning interest off of customers' unused cash, they have started to add a Debit and a Credit card into the mix. Along with that, what I am most bullish on is how they are enabling Venmo to be used in stores. I noticed even the other day, when I was on DoorDash, that Venmo is now an option to use for payment. They already made a very simple process begin to spread into the merchant business, which I believe will bring in a lot of revenue while raising profit margins.

Read the complete narrative.

Curious what ambitious forecasts drive this eye-catching valuation? One key pillar is Venmo’s accelerating integration into everyday commerce. The full narrative breaks down how bold expansion and inventive monetization strategies combine to set up this surprising price target. What numbers are powering this optimism? Only the complete narrative reveals the projection details and assumptions behind the dramatic upside.

Result: Fair Value of $105.25 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, slowing revenue growth and ongoing competitive pressures remain potential headwinds that could challenge the bullish long-term forecasts for PayPal.

Find out about the key risks to this PayPal Holdings narrative.

Build Your Own PayPal Holdings Narrative

Feel free to dive into the numbers yourself and shape your own view. Building a personal narrative about PayPal only takes a few minutes. Do it your way

A great starting point for your PayPal Holdings research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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