Paypal stock is down -11% post earnings, despite beating on revenue and EPS... Why?
🚀 Want to see what stocks I'm buying and why? Consider joining the VIP Membership Group (Discord) today! ► https://elblancofinance.com/
In Q1, Paypal's revenue was up by 9% compared to Square's revenue ex-BTC at 27% and Visa at 11%. Q1 EPS also increased by 61% to $1.17, which was above the estimated $1.10. The company's revenue of $7.04 billion was also higher than the estimated $6.98 billion. However, the number of accounts only increased by 1%, but total volume and account activity are up, which indicates more quality users than quantity.
Additionally, Paypal has announced a 5% buyback in 2023, which is worth $4 billion. However, cash flow has remained flat-to-down at 4.1% 12m trailing FCF yield post SBC (stock-based compensation). While the company has raised its guidance for full-year revenue and EPS growth to 20%, it trimmed its adjusted operating margin outlook for the fiscal year, disappointing investors.
The market is nervous that Paypal's business is being disrupted at its core by Apple, CashApp, and nimble payments competitors such as Stripe and Adyen. Furthermore, the CEO succession plan is not clear.
However, let's look at the bigger picture. Forward P/E is at a decade low while revenue, EPS, and FCF are projected to grow. We can look forward to tailwinds coming from Venmo, Braintree, PCPP, the MSFT deal, and possible multiple expansions. The stock might stay range-bound for a while longer, but at this point, we're in deep value. PYPL is trading at less than 14x NTM FCF and has $4.5B net cash.
So, what's the bottom line? While the market is currently nervous about Paypal, a long-term investment mindset can bring great benefits. If you're willing to be patient and ride out the bumps, Paypal may prove to be a profitable investment in the long run.
.......................
📸 Check me out on Instagram & Twitter!
https://www.instagram.com/elblancofinance/https://twitter.com/ElBlancoFinance
👉 Pay $349 USD to get access to a $14,000 funded account with Tradenet. Here is my referral code : https://elblanco.funded-account.com/
🛡 Open an Interactive Brokers account and get a $200 USD cash sign up bonus. https://ibkr.com/referral/alexandre412
🔷 Are you Canadian? 🇨🇦 Shakepay makes it easy to buy & sell Bitcoin with just a few taps. Plus, you can earn bitcoin daily simply by shaking your phone. Click on my referral link now, get $10 for signing up, and start earning.
➔ Shakepay: https://shakepay.me/r/CVW9C8R
✅ Create a Wealthsimple Trade account and get $10 for free when you deposit $100:
https://my.wealthsimple.com/app/public/trade-referral-signup?code=IDN9IA
✅ Create a QuesTrade margin account to buy OTC stocks and do pre/after market trading: QPass key: 386628227438240
...................................
DISCLAIMER - The content in these videos shall not be construed as financial advice. It is your responsibility to verify all information yourself. This is a Youtube video for entertainment purposes ONLY. Do not make investment decisions based on our videos. No copyright infringement is intended.
Links included in this description might be affiliate links. If you purchase a product or service with the links that I provide I may receive a small commission. There is no additional charge to you! Thank you for supporting my channel so I can continue to provide you with free content each week!
............................
Only responsible for gains, not losses
Let's get rich 🚀📈
Let's finagle this bagel 🥯
