PayPal stock has reached a very attractive price according to many fundamental analysts. What could trigger a change in the online payments giant’s share price?
The issue of "PayPal Shares" continues to keep investors’ attention high. The enormous interest in this topic is justified by the fact that the stock has collapsed by 80% compared to the highs of 2021, offering investors the prospect of purchasing at theoretically "discounted" prices compared to the year’s precedents. Several reasons, however, led to a significant drop in the price of PayPal shares.
But what could trigger new and notable interest from demand? To answer this question, it is necessary to analyze the fundamentals and technical aspects of the PYPL stock.
PayPal: What drives the stock price down?
August could have started in the best way, with strong positive expectations for the arrival of the new CEO, Alex Chriss, which however ended up turning negative, catching the market off guard once again. One of the reasons for the strong backlash seems to have been yet another news of an offloading of shares by a financial giant: Elliott Investment Management.
This is nothing new, the online shopping market is not going through the best of its days; or rather, after the pandemic push it will be difficult to reach those peaks in the level of online consumer spending again. What seems to have devastated the growth prospects of the digital payments giant was precisely the speed with which market expectations on the company’s turnover were reduced in the face of headwinds caused by the global economic context and the complete reopening post-pandemic. In short, a real pump and dump.
In addition, further restricting company margins and therefore future expectations on them is the greater segmentation of online payments market shares compared to the past. Following a purely fundamental analysis, the company indisputably presents very promising values. At current data, the operating margin remains at 21.4% and the average analysts’ assessments identify a fair price of $85-$90, still almost 40% higher than the current values. At the same time, an unpleasant piece of evidence that is probably taken into consideration by the market but little by the analytical models of analysts is precisely the possibility that the decreasing trend assumed by the rate of change quarter by quarter is maintained for a long time, lowering the average used to discount the cash flows, however, are still very good.
PayPal: How is the share price moving?
From a technical point of view, the stock is at its 2017 values and seems to have reacted positively to the $60 support level, after breaking it downwards around mid-August 2023.
- PYPL, 1D
Original article published on Money.it Italy 2023-09-04 14:06:00. Original title: PayPal: il prezzo delle azioni ha toccato il minimo?
