PayPal (PYPL) Collapsed 80% losing $200 Billion - Now Cheaper than Pre-Pandemic!!!!
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- Опубликовано: 16 окт 2024
- This video is a deep dive into PayPal pre and post Pandemic. The company is growing revenue and earnings but the stock is down 80%. When does this stock become a buy again? Let's review the Cash Flow and forecast a 10 Year Stock Return.
"Long ago, Ben Graham taught me that 'Price is what you pay; value is what you get.' Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down." - Warren Buffett
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All opinions expressed by Cameron Stewart at Rational Investing with Cameron Stewart, CFA or on Cashflowinvestingpro.com are solely Mr. Stewart’s opinions. You should not treat any opinion expressed by Mr. Stewart as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Mr. Stewart’s statements and opinions are subject to change without notice. Past performance is not indicative of future results. Mr. Stewart does not guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed on this show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this show. Before acting on information on this show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
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Thanks for posting. Honestly, nobody on youtube goes into this much detail on their analysis like you do.
Bruh... you cannot be serious
This was one of the best company deep dive videos i've ever seen. The mix of financial statement analysis + qualitaitive analysis of PYPL was amazing. Well done.
Can you create an updated version? They have a huge investing cash flow this year, wondering what that is from
I appreciate your honest reporting. I admire you a lot for educating everyone. It all depends on the information and method applied. I've seen people earn significant 7-figure profits in sinking markets and pull it off just as easily in bull markets. There is no doubt that the crash/recession is making someone wealthy.
It is more difficult to create a solid investing portfolio, thus I advise hiring an investment advisor. You can then receive plans created to address your particular long- and short-term goals and financial aspirations.
@@AshtonGrace I will need such tutelage. how is this going to work?
@@AshtonGrace Thanks for the advice. The location of your counsel was simple. I did my research on her before we agreed on a session. Considering her resume, she appears knowledgeable.
Amazing video! I just started thinking about starting a position in PYPL and your video helped a lot. Thanks!
No matter how you feel it shouldn't have a PE Ratio around 10. That's insane. Just wait until they get a new CEO this year. Especially if its one Wallstreet loves.
Excellent video, I think PayPal is extremely undervalued!
I think main question is why it’s continually dropping
@@ahsanawan765 Its actually showing Bullish trends on chart after low of 59s. Closed over 63 today
I've
‹Spot on ! our main focus right now should be on strategies to maneuver our current situation, lots of folks are making millions off this downmarket but such info doesn't make it to the news..
well the top players and pros have exclusive information and data trajectory that isn't disclosed to the public, knowing the strategies to apply in this time is one thing and having the right info to successfully pull it off is just another.
I agree, that's the more reason I prefer my day to day invt decisions being guided by a invt-coach, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using a invt-coach for over 2years+ and I've netted over 1.5million
@@darceydoberstein I guess that's why the demand for investment-advisers sky-rocketed by over
41.8% since the pandemic according to investopedia , Nevertheless do recommend the advisor that aided you
My advisor, Roger Allen Hill, is a portfolio diversification genius with extensive experience in the financial markets. Check his reputation on the internet with a quick search.
I bought pypl at 58 ish … not s large position but enough if it flies
Great analysis! With Alibaba being broken up, I don’t think anyone has properly evaluated them since more information has come out. Is that something you can model or do we have to wait until the dust settles with the individual companies?
I’m sure videos this in-depth takes a long time to make.
I appreciate it I’m sure others also. Thanks buddie
What I do to buy a stock is I put in a good till canceled buy order for 1 share on every stock that is good. Doesn't matter if it is AAPL META or CSCO or MOS or K or HPE or PYPL .
You be surprised at what triggers. I had a $60 buy order on PYPL years ago that finally triggered.
Update. I did take profit before earnings by selling half my position. I was in covered calls on everything. For earnings I sold calls to collect $1 at the 80 strike. It collapsed. It is around where I bought it.
A company that is a competitor but in the losing money phase and I am pretty sure is doing offerings and Cathie is throwing her ARKK investor money at it, which is kind of sad to see. Just a money pit for investors to burn it down in. But it does make PYPL a rough prospect for awhile if competitors are losing money no problem because people throw money at it.
I loved the video, subscribed. Wished you talked more about the quality of the business, their growth strategy and so on. My only problem with your assumptions is that PYPL, or any other company for that matter, will DISTRIBUTE the excess cash they make to the shareholder. Yeah, like that is common. Buying back shares during crazy inflated valuations is destroying value and if they won't do that they will very plausibly make some value destroying acquisitions. I lean towards mostly ignoring that part of the expected return because I've come to not expect companies to utilize their excess cash effectively. So the stock gain only (from 60$ to 146$) gives you 9% annual return... 😕 Maybe 10-11% if you do account for some of the cash generated. Not too bad, not amazing.
Someone with some actual sense
Refreshing to read amongst the sea of "Ebitdaaa" comments...
Just found your channel , great video, many thanks
This doesn't seem like a value trap to you? Yes, they check all the boxes, but how will PayPal move forward with FedNow service coming out in July? Thanks and love the content.
Similar to META earlier last year, I feel this sell off is overblown and the market is simply devaluing this company. I feel this is a great opportunity based on their current numbers
Yeah I think this is the best take...a lot of bearish long term takes on paypal but seems like this has to rebound to a normal valuation at minimum
Agreed. With forward P/E of only 12, I think $90 is a realistic price in 12 months.
Its a good company but their products completely suck-
1) Venmo is a good company, but they are notorious for withdrawing money from bank accounts without permissions
2) Paypal, I don't think anyone still uses it
3) Xoom, provides the worst transfer rates compared to wise, and remitly
Other products are not that good.
@@drbob512 Paypal isn't a great product tho
@@mohit4902I agree number are important but not enough. If better products are out there then you’re going to lose market shares.
This company is super undervalued. You need to act with a sense of urgency with these types of stocks. Thank you for this great analysis!
Lol, no it’s not
New subscriber and love your no bs approach to stock analysis. No clickbait garbage so keep it up. Question: I'm a long term investor. I'm using VTI as my core in my Roth . I want to DCA in biweekly but my budget stops about $100 short of 3 shares of VTI. ITOT is very similar to VTI with a slight performance lean to VTI. The cost of ITOT is under $100 bucks. I want to get my money in the market ASAP. Do you think it's ok to use VTI and ITOT together for DCA purposes or use just one?
Either one is fine , you can buy fractional shares of ITOT or VTI
@@manuvns Thanks. Schwab hasn't caught up to the fractional shares thing regarding ETFs.
Thanks Cameron! Much appreciate the overview on PayPal. Im holding from a recent purchase of $65 ish which I understand is quite a bit lower than many stockholders. It looks like it might be a good candidate to add at lower prices now. I hope the company is picking up a boat load of stock here.
many people bought, but paypal is just a bad product and people are averse to using it because they're untrustworthy and hv bad customer support
Lol actually i think their customer support is one of the best for buyers.
I had a case where the seller never sent me goods, so paypal refunded me.
Hi Cameron, IMHO, any values generated during the pandemic should be excluded from any analysis as they distort averages. As investors we look for stability/trends and thus these extreme highs and lows should be given less weight if any but I see that you include them to be forthcoming with data however, when valuing a company, it that normal to considered extreme highs and lows as they are obviously out of the norm? Thanks
Why did I buy pypl when you first talked about it... rip the 10K I invested in paypal around 195/sh
If you liked it at 195, you should love it at 65...
Not necessarily. If it happened within a narrower time frame then sure/yes. OR if the situation only improved(it hasn't)
Hi Cameron - thanks for the channel and the reviews of the these Stocks.
Shouldn't we include some Margin of Safety within these calculation? You are applying a conservative forecast...although MoS would include an extra safeguard!
@KATHIMORGAN2 is her user name for help.
Amazing how when a well known stock goes down considerably everyone rushes to write it off lol,,Meta went down to $88 just few months ago and look at it now., Paypal will recover nicely and people who passed up on it at these current prices will regret it.
One of the few undervalued stocks out there
According to the document you were referring to FCF had a 3% decrease in Q1/2023 not an increase.
Great video. Glad i found you! Subscribed
Great video Cameron. How about taking a look at Lithia Motors (LAD)?
It’s down big like PayPal with a dominant market position in its industry.
I’m compiling and picking stocks that I’d love to hold on to for a few years before retirement, do you think these stocks would do better over the years? I’d love to retire with at least $2million savings. Now you gotta rely on a pretty good diversification if you must stay green. Currently up 21% and being cautious. Still better deal than letting it sit in savings or checking earning near 5% interest.
Well up at 21% in this present market is impressive. I was wondering if investing in a cumulative ETF during this next decade is a sound investment. Or is it better to invest in a distributing ETF (even considering taxes)?
ETFs are cool. My portfolio is very much diversified so it's not like i have a particular fund i invest in. You should probably copy a licensed person more so one with experience of the past bear markets. I copy a chartered financial analyst Camille Anne Hector Been quite consistent. My portfolio returned $250k in Q4
With only 350k what do expect people to do ? 10 shares of one of those stocks will not get u anywhere. 3 shares of Vanguard ETF give me a break . Forget the past of 10x stocks ! Those free money days are over ! With 350k just buy a ETF like DIVO with a 5% monthly dividend and add what u can each month.
i am envious i've been in the red for too long even before the dip but would like to ask are you giving her your money or the money stays in your account?
Camille Anne Hector has got a website so you can check her out online and subsequently contact her from there.
Hey, great video there Cameron! :)
I would really love it if you could address now and in future videos the change overtime of specific items, such as debt.
They grew from practically 0 debt to 1.4x ebitda.
Also they have shrinked their stock based compensation massively and you ignored that fact.
Thanks!
The drop in SBC is because the price is down and the employee options are worthless but that can change as the price recovers. Debt will grow off zero as banks are willing to lend at attractive rates and mgmt used the tax savings of interest expense to buy back stock
Latest report has SBC at $1.2B when Net income is $2.4B
Maybe highlights the fact that we need to do more work to be able to challenge sell side / management targets.
Previous pypl vids had way higher terminal prices because of growth targets.
Youre absolutely right that they "add all kinds of garbage". But that is true for Free Cash Flow too. If you calculate the FCF for 2022 from a GAAP basis, you get 2.890 in EBIAT; adding D&A and substracting CAPEX and Change in NWC you get a completly different number. That number is 2.570 for the unlevered FCF. So the $5bn they state is utter garbage too
Great review Cameron, I've just started buying in to PYPL, I think its look like a solid buy at the current price.
Thanks for the Paypal video; good fundamental analysis. I think it will reach $150 in less than a decade as you hypothesized. My view is that it will reach $90 (from low 60's today, June 3) in the next 12 months, $125 in 2 years and $160 in 3 yrs, especially if we have a moderately bull market the next 3 years. PYPL will never be quite the growth stock of the past but 7-10% revenue growth per year seems doable and stock buybacks will help the price to reach 90, 120 and 160/sh.
would love to see an analysis of celcius holdings! ($celh). Note - i'm not a stock holder. I've just been hearing rumblings about it and the broader energy drink market.
Hey Cameron, I wonder what are your thoughts on VFC. You made a video a couple of months ago and the stock dropped a lot on an earnings beat. Great video an analysis as always! Thank you for sharing the knowledge
Love to hear the bear case for PayPal
Also would love to hear your perspective Cameron regarding AAP now that it has dropped 35% yesterday. Thanks
DPZ would be a great one to analyze after today.
Reported all the spam bots for you, sir. 🫡
Thanks for the consistent content!
Thanks for the great information and advice from Europe!
Can you do a update on Verizon and AT&T
Amazing! Thanks to share this kind of knowledge 👏🏻
This video is immaculately informative. Sensational
One of the first comments wohoo! Love your channel ❤️
Great job ! Out of curiosity, is there a reason why you favor IRR instead of MIRR. It seems to me that the latter is more "precise". Cheers.
I don’t think a 19x price multiple is appropriate to a company like this that barely has a moat. The company has fundamentally changed due to an adjustment in competitors over the last few years.
@Financial Freedom with Dennis They still have a moat in regards to being the biggest of them all, reputation with older demographic that has been using them for years and Venmo. These guys aren't going anywhere
Size and scale is a very effective moat as long as you continue to innovate and stay hungry.
Size is no moat for a payment app with outdated tech. Low net income margins shows the multiple is too high.
Paypal's one innovation has already been copied by literally every bank and fintech in existence. And atleast those banks can offer financial products.
@@kylelarson5074 except, literally everyone I know checks out using PayPal when given the option on a purchase.
Great video Cameron! I am curious what your thoughts are on Hanes stock. looks like a great opportunity currently.
I think it’s a cheap stock.
Thanks for your analysis! It helped me understand this stock much better.
I think it is a good time by "Sell puts" if you are not sure about PYPL price for a while, it has a great commission price also give us more time to clearfy how PYPL will go until we see their next earning on August.
Hi, thank you for the video. It was really insightful. However I would like to better understand the following:
1. Reason for calculating revenue as ratio of $ per transaction per account rather than $ per transaction
2. In the above, why has the ratio been taken at 5% for revenue calculation?
3. At the end, we assume ~53$ to be received over time through cash generation - With no dividend history and being a marginal share holder (hence cannot be part of buyback) - should this be included in IRR Calculation?
Would really appreciate anyone from the community to help me out here?
I believe the idea is the company has to give the cash back to the investor somehow, PYPL is currently doing that with share repurchases.
WHAT A GREAT VIDEO, NON BIASED, SOO MUCH SMALLER UNCOVERED FACTS HIDDEN IN THE RUBBLE.
You sure know how to produce quality content in this field
With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly-which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $125k bond/stocck portfolio
Yo Cameron at 4:16 you say that active accounts grows at 2% annually but it nearly triples
Ya sorry. The 2% was last year’s growth rate not the 10 yr CAGR
Where do you get the EBITDA values? When I look at the P&L for 2022 I find a Net income of $3,837B. The statement I"m reading shows line items for Dep. and Amo which are blank for 2022. Please help. Great information btw. I sold a rental property about 3 years ago and put the money into the market. Last year was rough but I've almost recouped all my losses.
Cameron. Please update us on homedepot and target stock. Thank you !
Amazing content....thanks man!
Do an entire video using just that side angle with zoom in on your face. Just keep that one angle where we pretty much cannot see a anything on the screen behind you.
"Ebitdaaa"
Love the SBC comments. Execs need to execute.
Great vid!
Great video, thanks for sharing your thoughts
Bought some at 62.50$, holding for years, we'll see what happens ;)
I've never used paypal or Venmo (based in UK) but would be interested to hear what the barrier to entry is with Paypal. I understand that braintree is widely used by SMEs but feel that Visa, mastercard and amex have a much greater barrier to entry by virtue of being in billions of wallets vs paypal, which is exposed to competition from the likes of Block, Apple, google etc
Im in canada and never used paypal. It seemed hard to sign up? Thats probably just me. Plus seems like credit cards is all one needs. But pypl is well known and 20 yr history and is now down in price. So worth a look. I honestly dont really understand it and who uses it. I rely on others who have better knowlege. So?
Visa had a paypal-like offering called "Visa checkout" which didn't seem to take off and now have apparently joined forces with mastercard and created "Click to pay" which is essentially the same thing. I didn't even know about this until I just looked it up. It's not as easy as people think to take over the payment system from Paypal, probably only apple or google can do it (they are both trying)
Google ran Google Checkout from 2006-2013 and canned it
What do you use in the UK?
@@neihgnot8320 instead of Venmo? Monzo, Starling, Revolut, probably others
should i buy now?
Thank you, I am just starting to accumulate PayPal. Have you done a deep dive into HIMS?
Aren’t they still losing money?
no, they have gone profitable in their last quarter adjusted EBITDA profitability of $6.1 million in Q1 2023
They have great growth , gross margin is great and subscriber retention is amazing
Revenue of $190.8 million, up 88% year-over-year in Q1 2023
Net loss of $10.1 million; Adjusted EBITDA profitability of $6.1 million in Q1 2023
Subscribers grew to over 1.2 million, up 87% year-over-year in Q1 2023
Raises full year 2023 revenue guidance to a range of $810 million to $830 million and Adjusted EBITDA guidance to a range of $25 million to $30 million@@CstewartCFA
You look like you use HIMS
Newbie.. very interesting with some depth but not inaccessible
What are your thoughts about OM outset medical?
Thanks for the excellent video
Constantly zooming in and out and changing camera angles for no reason... 'nice' to see some things don't change
"Ebitdaaa"
Looks like Cameron has his first hater lmao
It should be noted that the CEO of Paypal bought $ 2 million worth of stock in
February/ 2023 for $ 72.00 per stock. He should know the financial health of
the company. Over the last 4 -5 years, he has bought and sold large amounts of
Paypal stock, and has always made very good money. This is a large well established
company, that's trusted by many loyal customers, and will continue to grow.
You just can't go wrong buying this stock at $ 60.00. You will look at your computer
screen, and see it listed at $ 300 dollars in 3 years, and you will regret not buying it.
I hope it goes to 300
Should be noted the CEO sold 4.77 mil in April 😂😂 do some research
I don't understand how you get those annual income amounts. Paypal doesn't pay a dividend.
That’s the companies free cash flow.
Your stock owns that cash flow
The corporation's cash flow doesn't go to the shareholders. The only benefit to shareholders (outside of dividends) would therefore be if you could sell it higher than the purchase price.
calm down boomer
You are at a different stage of life... congratulations to you?
Great video, although I'm unsure about the moat that PayPal has honestly.
Whatever the case it shouldn't be a PE Ratio is 10. That's insane. Just wait until they get a new CEO this year. Especially if its one Wallstreet loves
Other sources do not believe PayPal has much of a moat. What is the argument that they do have a moat?
Hey Cameron, I always love your videos- informative and well thought out. Question: what do you think of the FedNow rollout? The Fed says there will be no competition between PayPal and Square, but not sure if they’ve been always honest. I recently sold PYPL just because of this- otherwise I’d still have it in my portfolio.
Dutch Bros would also be a good one to do.
Thanks again, lets do Target and UPS.
Can you look at ICL??
Ev/Ebita can goto 30 again,,,someway higher sharepice I expect
Hi Cameron! Love your videos! Question: I'm trying to understand how the consistent cashflow over time translates to me earning money by investing in the stock, regardless of how the price of the stock acts. I understand that cashflow is important to the health and the success of a company, but how can I make money from the cashflow, if the stock price itself doesn't increase? Thanks for your great videos!
When you buy a stock, you buy a piece of a business.
If this business earns 100$ in free cash flow and you own 1 out of 10 shares, you, as part owner, have a right regarding the 10$ of free cash flow.
Now obviously you cannot decide individually what happens with this free cash flow this depends on companies management.
As the name free cash flow said, this money is “left over” current operations are already paid.
So the business can decide to use that money in different ways.
It can:
- pay out the 10$ per share as a dividend (in this case you get the money directly)
- buy back shares and increasing you ownership of the business. Now you own for example 1/9th if the business (everything remaining the same, the worth of your share should increase as you own a bigger portion of the business)
- pay down debt: you are now owning a more financially stable company (everything else remaining equal, this should increase the stocks value as its balance sheet is less risky and more appealing to other investors) e.g would you want to own AT&T with their current 100B+ debt obligations or rather (even for a higher price) invest in AT&T with 10B in debt.
- acquisitions (buying other companies to grow the business) most companies suck at this and a lot of investors money gets burned here. But in theory they buy another business, integrate it and increase their revenue, earnings and free cash flow.
Better business = higher dividends and /or higher share price.
- invest back in themselves (new offices, equipment, staff etc.) to grow the business in same or different field.
Also depends a lot of track record of management. Can work out well but free cash flow might just get burned.
So you need to keep track of what the management plans to do with the money.
Thanks, @@strengthbasetraining279! That is a great explanation and that really helps me understand how the cashflow benefits the investor. Thank you very much!!
Comments below are correct. You are entrusting management to reinvest the cash flow generated at attractive rates of return to compound over time. You need management to compound your money, they are the key.
@@ahikernamedgq thanks for the question.
@@CstewartCFA Thank you!!
I'm sorry, I'm new here.
What is "jack"?
Money
@@CstewartCFA Oh, OK.
Agree with this analysis. Look at advance auto parts next.
I put that into the cash flow club
Great video
Must go up again,,,very oversold
Nice video
Thank you Cameron.
Global stocks headed for their biggest weekly decline in more than three months. European shares fluctuated, with a record 36% drop in Siemens Energy AG’s shares after a profit warning dragging on the broader market. US index futures fell. According to chief economist at UBS Global Wealth Management “Financial markets have had one of those switches in the narrative that happen occasionally, and are starting to worry about higher interest rates driving recessions,” I'm still at a crossroads deciding if to liquidate my $300k stock portfolio, what’s the best way to take advantage of the market?
There are two issues that are accounting Red Flags: SBC and the dodgy bitcoin investments.
Please do 3M= MMM
Sell some puts on target qt 120 strike
You don't take into consideration the competition and new entrants that will continue hurting future earnings
I did buy PayPal and am at about $61 per share. With that said my only concern is that PayPal is in the buy now pay later market which I am not a fan of. Anyone else see this as a weight on the company?
Possible when credit losses pile up
I bought at about 195... rip
Bought once Cameron was talking about it originally
Not long after your comment, they sold at least part of that portfolio to a European buyer,
Anyone analysis AAN（Aaron furniture rental）？ 1/2 book value stock
I thought these were called 10k's. But now you are calling it a 10Q. I'm confused cause you used to call them the prior.
Please stop changing camera angels, very annoying, besides that great channel
I like it
Helps viewers with short attention spans... but yes super annoying
I think Cameron likes it since it helps to have extra eyes monitoring for basal cell carcinomas. I say do an entire video from that side angle with a nice zoom in on his face. Just keep that one where we pretty much cannot see a anything on the screen behind him.
6:37
Lol! I doubt he will ever stop. He's like Miley
Paypal is more undervalued than Meta before it rebounded. Amazing opportunity
Agree
Can’t really predict future cash flow when apple is eating its lunch. There’s no reason to use PayPal when there’s Apple Pay. Buy long dated puts
PYPL good stock if you can buy for 58-59$
You think it’s because of fednow? The feds version of PayPal.
Can we do an update please
IMHO buying PYPL under 65 is solid. Around 60 is ideal. There was a window of opportunity to get it under 60. I took that window. Above 65 the risk increases - If I buy above 65 I would sell covered calls to get that cost basis below 65.
You’re on to some thing