PayPal: Growth Outlook Still Disappointing

  • PayPal’s price action has been muted due to a lack of growth catalysts and a decline in active customer accounts.
  • Transaction revenue has shown some signs of a rebound, but net revenue growth remains in the single digits.
  • Active customer accounts have declined for three consecutive quarters, highlighting the need for customer adoptions to sustainably boost volumes.
  • Margin expansion on unbranded is the key, as overall margins have stabilized but remain flat over the past few quarters.
  • The stock’s valuation multiples look very cheap but remains a value trap as the growth outlook keeps disappointing investors.

Investment Thesis

PayPal Holdings (NASDAQ:PYPL)’s price action has been muted for the past year due to a lack of growth catalysts and a deterioration in active customer accounts. In my previous