Does MM like PayPal Holdings after its recent plunge?

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Question asked 11/06/2022

Does MM like PayPal Holdings after its recent plunge?

Thanks for taking my question! Best regards, PYPL (PayPal Holdings) is the world’s leader in the payment system. Its 1 yr high share price is US$310 and is now trading around US$88. Although PYPL is not as dominant as they’re few years ago due to competition, it looks cheap at current level. Do you think that the US Tech shares is at or near the bottom? Is this the time to consider investing in a US Tech leader?

Answer

Hi Peter,

We do believe US tech stocks are starting to provide some value after their savage declines over the last 6-months, as for PYPL after its standout underperformance there are clearly some structural plays at work as opposed to just an aggressive P/E or valuation contraction and although we still own it in our International Portfolio we are keener to sell a decent bounce as opposed to buying ongoing weakness.

PYPL missed earnings in February and abandoned its 5-year financial targets which when combined with the sell-off in tech led to the far from subtle decline. However the on-line payment company has recently released a BNPL offering in Japan & Germany illustrating its still moving forward with innovation etc. In the short-term we can see a decent bounce back above $US100 but its been a difficult time picking lows in US tech through 2022 hence caution is warranted.

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PayPal (PYPL US)

LAST UPDATED 10/06/2022 12:45

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