PYPL

PayPal Holdings Inc

Finance/Real Estate, TMT


Presented:04/19/2017
Price:$43.30
Cap:$52.65B
Current Price:$79.55
Cap:$81.33B

Presented

Date04/19/2017
Price$43.30
Market Cap$52.65B
Ent Value$43.02B
P/E Ratio37.15x
Book Value$12.19
Div Yield0%
Shares O/S1,216.00M
Ave Daily Vol6,410,351
Short Int2.84%

Current

Price$79.55
Market Cap$81.33B
PayPal Holdings, Inc. enables digital and mobile payments on behalf of consumers and merchants worldwide. It provides a simpler and safer way for businesses of all sizes to accept payments from merchant websites, mobile devices and applications, and at offline retail locations through a range of payment solutions. It also facilitates person to person payments through PayPal, Venmo, and Xoom. The company was founded in January 2015 and is headquartered in San Jose, CA.

Publicly traded companies mentioned herein: Alibaba Group Holding Ltd (BABA), Apple Inc (AAPL), eBay Inc (EBAY), Facebook Inc (FB), Mastercard (MA), PayPal Holdings Inc (PYPL), Square Inc (SQ), Visa Inc (V)

Highlights

The group was discussing how well large cap internet companies have performed year-to-date, including companies such as Facebook and Google, and when the question was posed, “Does anyone have a long that has underperformed?” the presenter said, “Yes, PayPal (PYPL)”. At $43-44 today, PYPL is up just ~10% from when the spin-off from eBay was completed (July 2015), and “its enterprise value might actually be unchanged due to how much cash the business has generated (cash and equivalents grew +14% year-over-year from 2015 to 2016)”. The presenter has been long the stock, and sees a very favorable risk/ reward setup for patient investors. PYPL could potentially exit 2018 with ~40% if its market cap in cash and has yet to monetize two valuable assets in Venmo and Braintree; and looking out longer-term, there appears to be a Visa/ Mastercard-like EBIT margin expansion opportunity that could drive profitability materially higher. As such, he intends to hold the stock and expects the recent underperformance relative to the market and peers to reverse.

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Idea Discussion

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