PYPL - Embedded Expectations Analysis - 2021 07 16
PayPal Holdings, Inc. (PYPL:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 76.1x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about meeting 2021 guidance, operating margin performance, and transaction cost reduction.Specifically, management may have concerns about raising 2021 EPS growth and net new active accounts guidance, as well as maintaining transaction cost reduction trends for Buy Now, Pay Later. Additionally, they may lack confidence in their ability to beat revenue guidance, sustain operating and transaction margin performance, and improve other value-added service revenue. Furthermore, management may have concerns about their reserve coverage ratio, their innovation partnerships with governments, and the pace of the travel recovery. Finally, they may be exaggerating the extent of the paradigm shift to a digital economy and retail landscape and they may lack confidence in their ability to expand Buy Now, Pay Later's overall share in checkout platforms.
PayPal Holdings is a technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants worldwide. The company's combined payment solutions include its PayPal, PayPal Credit, Braintree, Venmo, Xoom and iZettle products and services. PayPal's payment solutions enable the company's customers to send and receive payments. PayPal helps merchants and consumers connect, transact, and complete payments, whether they are online, on a mobile device, in an app, or in person. The company provides proprietary payment solutions accepted by merchants that enable the completion of payments on the company's Payments Platform on behalf of its customers.
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