Summary
- PayPal’s most recent quarter was accompanied with better than expected results and encouraging expectations about the near-term.
- A contraction of non-GAAP operating margin is to be expected in the coming year, but this is already reflected within the share price.
- In spite of the attractive long-term opportunity, investors should be mindful of short-term risks associated with investor sentiment.
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After falling nearly 80% from its recent highs, PayPal (NASDAQ:PYPL) has now turned into everyone’s favourite contrarian story. Analysts are now rushing to call the bottom as the stock appears very cheap.
Although I have turned bullish on the stock myself a couple of months ago, I have been warning against being too optimistic and rushing to call the bottom.
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