Thoughts on PayPal (PYPL US)
Hi Team! PayPal. They look like they have reported well and have alot of cash but the share price is weak and in a downtrend whereas Visa is in a strong uptrend. Your thoughts on this company? Thanks, Kim
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Answer
Hi Kim,
This weeks 3rd quarter results from PayPal (PYPL US) topped analyst expectations, they raised full-year earnings forecast and announced a new chief financial officer, Jamie Miller, a former CFO at EY. Filling that vacancy, which had been in place for nearly eight months, was an important task for PayPal’s new chief executive, Alex Chriss, who just took the top spot last month. Now Chriss has to prove he’s ready to lead the company – he mentioned this week that he’s looking to increase earnings away from payments.
- PYPL has dropped -80% from its 2021 high and although it looks cheap after its latest result its not on our investment menu.
- However, for a “trade” a short sharp 20-30% relief rally wouldn’t surprise after the result.
- Block (SQ2) also had a very good quarterly out this week, implying an improvement in the dynamics of the payments space more broadly.
Conversely Visa (V US) is poised to make all time highs into Christmas, only 5% away. The risk/reward isn’t exciting but we wouldn’t be fading the trend at this point in time.
