With the market starting strong in 2024 and reaching new highs, investors may think they missed the boat and there are no bargains. But there are still good investments.
Check out PayPal (NASDAQ: PYPL). Shares of this fintech powerhouse are 80% below their peak. Despite that pricing history, don't give up. Three reasons make PayPal a no-brainer growth company to purchase today at $100 and hold for the long term.
Digital payments leader PayPal dominates the electronic payments business, therefore investors will want to buy its shares. PayPal has successfully facilitated global commerce since its founding over two decades ago. Over 200 nations and regions are served by this large company. TPV was $1.5 trillion in 2023. This was 13% higher than 2022 and more than double pre-pandemic 2019.
PayPal was the most accepted digital wallet at the top 1,500 shops in North America and Europe in 2022, with a near 80% acceptance rate. Braintree, which serves merchants, has increased TPV faster than the rest of the firm. PayPal dominates. Online shopping and other cashless transactions should boost long-term growth for the organization.
Competitive advantages PayPal has many benefits over competitors. Another key incentive to buy this stock now. The company has 428 million active accounts as of Dec. 31, providing a merchant-consumer ecosystem. Strong network effects are attractive to businesses.
PayPal can connect exponentially more consumers and merchants due to its large user base. This makes PayPal more valuable to all users than smaller payment services. The corporation resolved the chicken-and-egg issue. Without customers or a place to buy, adding merchants and consumers to a new network would be nearly difficult.
This setup gives PayPal a huge data edge. From store and consumer interactions, it may learn about purchasing trends and user behavior, improving authorization rates and reducing fraud. Payments companies that solely handle one side of a transaction lack PayPal's perspective. This appeals to merchants, providing the enterprise an edge.
PayPal has many benefits, yet it's still vulnerable to industry changes. Ultimately, it's about making users' lives easier and commerce more frictionless. PayPal faces many competitors. However, its industry status deserves credit.
Low valuation PayPal's absence from the market rally since 2023 is disheartening for shareholders. Despite strong financial performance, the stock is cheap, trading at a forward price-to-earnings ratio of 12.2. At that low price, investors may think they're getting a bad business. PayPal outperforms the average corporation based on the above variables. Its robust financial sheet and stable free cash flow allow management to repurchase shares.
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