- PayPal declined extremely steeply last week following earnings, but it seems like Mr. Market might be a bit irrational again.
- Not only could PayPal beat expectations, raise guidance and report solid first quarter results, the business model still seems to be intact.
- But PayPal’s stock continues to decline and is trading now for very depressed valuation multiples, which is generating a real bargain for investors.
- Of course, we saw a declining number of active accounts for the first time – and this should be watched closely as it could generate a long-term problem for PayPal.
At the beginning of last week, PayPal Holdings (NASDAQ:PYPL) reported its first quarter results and although results seemed fine on the surface, the market reacted quite heavily to the results and PayPal lost about 15% in the following trading days and the stock declined not only to a new 52-week low but is now trading for prices we haven’t seen since 2017.
In the following article, I will look at some typical reasons why a stock might decline and analyze if this is also the case for PayPal. But although I see the risk of lower stock prices in the short term – we will get to this – the market got it wrong and is on its path to create a real bargain.
READ FULL ARTICLE HERE!