chameleonseye
I wrote about PayPal Holdings, Inc. (NASDAQ:PYPL) for the first time on 21 March in an article entitled PayPal: Come For the Value, Stay for the Growth. My thesis was that PayPal was attractively priced, and the decline in
PayPal: Perplexity Agentic Payments Deal Supports Long-Term Bull Thesis
Summary
- As PayPal renegotiates terms with unprofitable unbranded checkout (Braintree) customers, revenue growth is muted. Under the surface, demand for the company's products is strong.
- PayPal looks to be good value as it improves profitability, grows active accounts and engagement, and aggressively buys back shares.
- In the long term, new products can accelerate growth, with Debit Card TPV growing 64% y-o-y, Venmo TPV growing 50%, and BNPL volume up 20%.
- PayPal, through a new partnership with Perplexity, is the first to market with an LLM-linked AI commerce agent, showing the company can be a formidable competitor under new CEO Alex Chriss.
- I reiterate my buy rating and $120 end-of-2027 price target, as PayPal offers multiple paths to market-beating returns.
I am a UK-based long-only investor with a strategy which revolves around finding companies which can be multi-baggers over a 5-10 year time horizon, though, as a great man once said, my favourite holding period is forever. I am looking for companies that have a high probability of substantial revenue and earnings growth which is not fully appreciated in current market prices. I rarely take positions in stocks which are GAAP unprofitable, and if I do it will only be a small position. I am sector agnostic, though I prefer to invest in less cyclical and higher growth areas. My geographical bias is towards the United States. I have an Investment Management Certification qualification from the CFA Institute of the United Kingdom. I have found that writing helps me to crystallize my thoughts and to maintain sufficient rigour in my research process. It also helps me to hold myself accountable and to avoid mentally re-writing history. In fact, I recommend this salutary exercise to all active investors whether or not the writings are meant for publication. Seeking Alpha is a great resource with a flourishing community that I am happy to be a part of, so becoming a contributor was a natural step. I hope you enjoy my offerings.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of PYPL 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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