Mediocre Outlook on PayPal Driven by Buyback Dependency

3 months ago

Daniel Pronk

"So I do not think that PayPal share price is going to rally significantly because so much of its per share profit growth comes from buybacks. I think that PayPal, at least in my opinion, is looking like it's selling for fair value today. Overall, I also think that PayPal is not necessarily the highest quality business that I have ever seen in the market, and therefore I am just again not really interested in PayPal."

The speaker offers a tepid, cautionary view on PayPal, arguing that its earnings per share growth is heavily reliant on buybacks rather than organic improvement. He concludes that the stock, while fairly valued, lacks the quality to generate substantial upside.

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