PayPal: Strong Results And A Massive Shareholder Yield

(10min)

Summary

  • PayPal Holdings, Inc. reported better-than-expected Q1 earnings, with a significant EPS beat, despite a slight revenue miss, and shares are currently trading at an attractive valuation.
  • The company demonstrated strong cost controls, reducing operating expenses by 2%, which contributed to a 16% increase in operating profits and a 23% EPS growth.
  • PayPal continues to execute substantial share buybacks, reducing its share count by 1.5% in Q1 alone, with plans for $6 billion in buybacks this year.
  • Trading at just 13x net earnings and delivering over 20% EPS growth, PYPL stock presents a compelling investment opportunity, despite some business growth challenges.
  • Looking for a helping hand in the market? Members of Cash Flow Club get exclusive ideas and guidance to navigate any climate. Learn More »

:Silhouette of upset Australian woman over PayPal logo

chameleonseye

Article Thesis

PayPal Holdings, Inc. (NASDAQ:PYPL) reported better-than-expected quarterly earnings results on Tuesday. The company has seen its shares sell-off in recent months, which has made its valuation pretty inexpensive. Between nice profit growth, a solid pace of shareholder

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This article was written by

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Jonathan Weber holds an engineering degree and has been active in the stock market and as a freelance analyst for many years. He has been sharing his research on Seeking Alpha since 2014. Jonathan’s primary focus is on value and income stocks but he covers growth occasionally.

He is a contributing author for the investing group Cash Flow Club where along with Darren McCammon, they focus on company cash flows and their access to capital. Core features include: access to the leader’s personal income portfolio targeting 6%+ yield, community chat, the “Best Opportunities” List, coverage of energy midstream, commercial mREITs, BDCs, and shipping sectors,, and transparency on performance. Learn More.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in PYPL over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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