und hohes Wachstum PayPal stock: low P/E ratio and high growth

Last Updated: 29. Januar 2024By

One of the most underestimated stocks at the moment is the financial services provider PayPal. I know that many investors have invested in this stock in recent years – maybe even you – and have been disappointed. The company has not developed as quickly as hoped. But from my perspective, the tide is now turning. On February 7th, PayPal will release its quarterly results. Then, other forces may also recognize that the stock has become significantly cheaper.

PayPal: Cheap! What does „cheap“ even mean, you may ask. And rightly so. I do not have the official numbers for the fourth quarter at the moment. However, analysts expect that profits were quite high last year. This should also be reflected in the fourth quarter.

Overall, the market expects profits of around $4 billion for the entire year. The market capitalization currently stands at around $66.6 billion – that’s what the market is paying right now. This means that the stock had a P/E ratio of around 16.8 for the past year. In 2020, the market paid a P/E ratio of more than 65. In 2021, it was more than 50, and in 2022 it was still 34.

Even better: In the upcoming fiscal year or current calendar year, the P/E ratio is estimated to be only around 15.5 or 15.4 because profits are expected to increase. Therefore, the company has become significantly cheaper in historical comparison – with itself. This has been proven.

PayPal: The Environment is Improving Of course, it is not right to rely solely on one key figure. But the P/S ratio, the price-to-sales ratio, has decreased from 12.8 in 2020 to approximately 2.2 for the past fiscal year and only around 2 for the new fiscal year.

So, the stock is clearly cheaper. Analysts also see it this way. A consensus among various analysts places the stock at around €67. Currently, PayPal is trading at around €56. Personally, I believe that the analysts‘ estimates are well-founded.

The trend development in recent weeks has become significantly better. The stock has been trending upwards significantly in the chart. From my perspective, it looks like PayPal will present itself even more attractively on February 7th. You can certainly take a closer look at the stock.

PayPal: Quarterly results on February 7th that can help – WKN: A14R7U – ISIN: US70450Y1038 Source: https://fundamental.aktienscreener.com/US70450Y1038/EI/paypal-holdings-inc/data