Stock Analysis

Is Now The Time To Look At Buying PayPal Holdings, Inc. (NASDAQ:PYPL)?

  •  Updated
NasdaqGS:PYPL
Source: Shutterstock

PayPal Holdings, Inc. (NASDAQ:PYPL) received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine PayPal Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for PayPal Holdings

Is PayPal Holdings Still Cheap?

Great news for investors – PayPal Holdings is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $138.32, but it is currently trading at US$91.13 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, PayPal Holdings’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of PayPal Holdings look like?

earnings-and-revenue-growth
NasdaqGS:PYPL Earnings and Revenue Growth September 6th 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. PayPal Holdings' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since PYPL is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on PYPL for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PYPL. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

So while earnings quality is important, it's equally important to consider the risks facing PayPal Holdings at this point in time. Case in point: We've spotted 3 warning signs for PayPal Holdings you should be aware of.

If you are no longer interested in PayPal Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Valuation is complex, but we're helping make it simple.

Find out whether PayPal Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

About NasdaqGS:PYPL

PayPal Holdings

PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation3
Future Growth5
Past Performance1
Financial Health5
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

High growth potential with excellent balance sheet.