PayPal's (NASDAQ: PYPL) share price has stumbled by more than 25% year to date, and the stock now trades at a P/E ratio of 8. However, that doesn't make it a buy right away, and it may never climb to a lofty P/E ratio now that the growth narrative is mostly dead.
PayPal delivered 7% year-over-year revenue growth in the first quarter, which is well below that of emerging fintech stocks like SoFi Technologies (up 41% in Q1) and Robinhood Markets (up 15%). PayPal's revenue compound annual growth rate (CAGR) has been declining in recent years. It has a 10-year CAGR of 13.9%, but only a 7.2% CAGR over the past three years.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
PayPal isn't delivering high user growth rates either. The company reached 439 million daily active users in Q1, which only represents a 1% year-over-year increase. Meanwhile, Meta Platforms, a company known by almost everyone, delivered 4% year-over-year user growth but turned that into 33% year-over-year revenue growth. More specifically, in fintech, SoFi grew its user base by 35% year over year.
PayPal doesn't have the exciting user growth rates of SoFi, and it can't translate low user growth into surging sales the way Meta Platforms can. PayPal CEO Enrique Lores said in the Q1 press release that he was confident that the company would soon return to "a more durable path to long-term growth," but the multiyear trend makes it an uphill battle.
PayPal delivered 7% year-over-year revenue growth in the first quarter, which is well below that of emerging fintech stocks like SoFi Technologies (up 41% in Q1) and Robinhood Markets (up 15%). PayPal's revenue compound annual growth rate (CAGR) has been declining in recent years. It has a 10-year CAGR of 13.9%, but only a 7.2% CAGR over the past three years.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
PayPal isn't delivering high user growth rates either. The company reached 439 million daily active users in Q1, which only represents a 1% year-over-year increase. Meanwhile, Meta Platforms, a company known by almost everyone, delivered 4% year-over-year user growth but turned that into 33% year-over-year revenue growth. More specifically, in fintech, SoFi grew its user base by 35% year over year.
PayPal doesn't have the exciting user growth rates of SoFi, and it can't translate low user growth into surging sales the way Meta Platforms can. PayPal CEO Enrique Lores said in the Q1 press release that he was confident that the company would soon return to "a more durable path to long-term growth," but the multiyear trend makes it an uphill battle.
4 months ago
