Alistair Berg
Still cheap, still unloved
Every time I return to PayPal (NASDAQ:PYPL) as an investment idea, the stock has gone through a rise and then a fallback down to around this level in the $60s. I started buying and writing about PayPal right
PayPal: Earnings Are Mixed, Stock Is Still Very Cheap
Summary
- PayPal is trading near a FWD PEG ratio of 1 when looking at 2026 earnings expectations.
- PayPal trades below long-term growth rates in earnings, revenue, and free cash flow.
- Q1 earnings showed amazing growth in margin expansion and profitability, but revenue growth being only 1% is still the one black eye.
- Even when backing out share-based comp, PayPal has a free cash flow yield of over 8%, cheap in any sector.
- The balance sheet is also rock solid, with more cash than long-term debt and long-term debt less than 1.5 X EBITDA.
I'm a full time value investor and writer who enjoys using classical value ratios to pick my portfolio. My previous working background is in private credit and CRE mezzanine financing for a family office. I'm also a fluent Mandarin speaker in both business and court settings, previously serving as a court interpreter. I have spent a good chunk of my adult working life in China and Asia. I have worked with top CRE developers in the past including The Witkoff Group , Kushner Companies, Durst Organization and Fortress Investment Group.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of PYPL, V, MA either through stock ownership, options, or other derivatives. 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.
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