Down 16% from its 52-week high, should you buy PayPal stock now?

Fintech company PayPal (PYPL) quickly gained global recognition with its user-friendly platform offering services in 25 currencies and over 200 countries. However, the company's stock price fell due to slowing growth. -16.5% down from 52-week high.

Stock prices just went up 6% since the beginning of the yearthe broader S&P 500 index ($SPX) Increased by 10%.

Nevertheless, management emphasized in its recent fourth-quarter results that the company is in a period of transformation, which could lead to improved financials. Wall Street is cautiously optimistic about PayPal stock. See if PayPal is a good deal today.

PayPal's fourth quarter showed resilience

Over the years, several factors have influenced PayPal's growth. From the 2015 separation from eBay to ongoing macroeconomic pressures, all of these are acting as headwinds. However, trading volumes continue to increase, driving revenue growth.

In 2023, PayPal will 426 million Total active accounts increased, and revenue increased 8% year-over-year to $29.7 billion. Adjusted earnings in 2023 increased 24% compared to 2022. Last year, PayPal expanded its executive team and named a new CEO. The new management team and its strategic initiatives may help the company regain its footing in the coming years.

AI could drive growth

PayPal has also made significant changes to its existing services, as well as several new services with: Artificial intelligence (AI). introduced AI smart receipt This allows customers to track their purchases and receive suggestions for future purchases.

The company also introduced passing lane, A one-click guest checkout process allows customers to avoid the time-consuming process of entering information every time they make a purchase. In the pilot phase, FastLane reduced checkout times by up to 40%.

Additionally, the company is redesigning the brand's checkout process using facial recognition software to increase efficiency.

Management also believes its size has affected its profitability and plans to reduce its global workforce by 9% by 2024. CEO Alex Chris said, “2024 is the year we focus on positioning PayPal for long-term success.”

Like Wall Street, management has a cautious outlook. Adjusted EPS Consistent with 2023 EPS of $5.10. Analysts, on the other hand, expect the stock to rise slightly by 0.60% to $5.13 per share, with earnings expected to increase by 7%. However, in 2025 profits are expected to increase by 9.8%, and then sales are expected to increase by 7.8%.

What is Wall Street saying about PayPal stock?

A new growth strategy under new management has the potential to restore PayPal's growth trajectory, but it will take time. Regarding that topic, american bank Securities analyst Jason Kufferberg advised investors to be patient as 2024 will be a transition year for the company. The analyst believes the company's new strategy will not have an immediate impact. As a result, he gave the stock a “hold” rating and set a price target of $64.

morgan stanley recently reiterated its “hold” rating with a price target of $62.

Overall, Wall Street rates PayPal stock at '.buy in moderation” Of the 38 analysts covering the stock, 23 rate it a “hold,” 12 rate it a “strong buy,” and 3 rate it a “moderate buy.” The average price target is $69.56, 6.8% above current levels, while the high price target of $85 suggests a potential upside of 30.5% over the next 12 months.

PayPal trades at 11x expected 2025 earnings compared to peer Block (SQ)currently trading at 20x 2025 forward P/E.

PayPal Stock Conclusion

PayPal's lukewarm growth may not be appealing to investors right now, but it has a lot of potential once the company completes its transition and macroeconomic conditions improve. Given its long-term prospects in e-commerce and digital finance, I believe PayPal stock is reasonably valued today.

On the date of publication, Sashree Mohanty I had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. Please see the Barchart Disclosure Policy for more information. here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Summarize this content to 100 words
Fintech company PayPal (PYPL) quickly gained global recognition with its user-friendly platform offering services in 25 currencies and over 200 countries. However, the company's stock price fell due to slowing growth. -16.5% down from 52-week high. Stock prices just went up 6% since the beginning of the yearthe broader S&P 500 index ($SPX) Increased by 10%.

Nevertheless, management emphasized in its recent fourth-quarter results that the company is in a period of transformation, which could lead to improved financials. Wall Street is cautiously optimistic about PayPal stock. See if PayPal is a good deal today.www.barchart.com
PayPal's fourth quarter showed resilienceOver the years, several factors have influenced PayPal's growth. From the 2015 separation from eBay to ongoing macroeconomic pressures, all of these are acting as headwinds. However, trading volumes continue to increase, driving revenue growth.In 2023, PayPal will 426 million Total active accounts increased, and revenue increased 8% year-over-year to $29.7 billion. Adjusted earnings in 2023 increased 24% compared to 2022. Last year, PayPal expanded its executive team and named a new CEO. The new management team and its strategic initiatives may help the company regain its footing in the coming years.AI could drive growthPayPal has also made significant changes to its existing services, as well as several new services with: Artificial intelligence (AI). introduced AI smart receipt This allows customers to track their purchases and receive suggestions for future purchases.The company also introduced passing lane, A one-click guest checkout process allows customers to avoid the time-consuming process of entering information every time they make a purchase. In the pilot phase, FastLane reduced checkout times by up to 40%.

Additionally, the company is redesigning the brand's checkout process using facial recognition software to increase efficiency.Management also believes its size has affected its profitability and plans to reduce its global workforce by 9% by 2024. CEO Alex Chris said, “2024 is the year we focus on positioning PayPal for long-term success.”Like Wall Street, management has a cautious outlook. Adjusted EPS Consistent with 2023 EPS of $5.10. Analysts, on the other hand, expect the stock to rise slightly by 0.60% to $5.13 per share, with earnings expected to increase by 7%. However, in 2025 profits are expected to increase by 9.8%, and then sales are expected to increase by 7.8%.What is Wall Street saying about PayPal stock?A new growth strategy under new management has the potential to restore PayPal's growth trajectory, but it will take time. Regarding that topic, american bank Securities analyst Jason Kufferberg advised investors to be patient as 2024 will be a transition year for the company. The analyst believes the company's new strategy will not have an immediate impact. As a result, he gave the stock a “hold” rating and set a price target of $64. morgan stanley recently reiterated its “hold” rating with a price target of $62.

Overall, Wall Street rates PayPal stock at '.buy in moderation” Of the 38 analysts covering the stock, 23 rate it a “hold,” 12 rate it a “strong buy,” and 3 rate it a “moderate buy.” The average price target is $69.56, 6.8% above current levels, while the high price target of $85 suggests a potential upside of 30.5% over the next 12 months.www.barchart.com
PayPal trades at 11x expected 2025 earnings compared to peer Block (SQ)currently trading at 20x 2025 forward P/E.
PayPal Stock ConclusionPayPal's lukewarm growth may not be appealing to investors right now, but it has a lot of potential once the company completes its transition and macroeconomic conditions improve. Given its long-term prospects in e-commerce and digital finance, I believe PayPal stock is reasonably valued today.On the date of publication, Sashree Mohanty I had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. Please see the Barchart Disclosure Policy for more information. here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

https://www.nasdaq.com/articles/down-16-from-52-week-highs-is-paypal-stock-a-buy-now Down 16% from its 52-week high, should you buy PayPal stock now?