Let's start the ball rolling with Craigs thoughts
Investment view
The payments industry is highly complex, fast-changing and very competitive.
A key question remains around PYPL's place in this industry. PYPL has a dominant position in digital wallet payments (with 80% acceptance with top retailers compared with 30% for Apple Pay) although the intensely competitive landscape is pointing to a shrinking moat. Growth in unbranded processing, which we think is a no moat business, but is highly scalable, is pressuring margins. We believe PYPL is a payments enabler looking to penetrate all parts of the payments chain – branded and unbranded and it continues to head in the right direction by offering new products and innovations (Stablecoin), improving existing products (checkout modernisation) while continuing to look for cost efficiencies in its business which should drive good margin expansion and support mid-teens earnings growth over the medium term.
PYPL has de-rated from a peak multiple of 55x forward earnings to 11.7x currently. It's now trading at a 55% discount to Visa despite having similar medium-term growth prospects, albeit with higher risks. For now, some discount is warranted given execution risk, a more intense competitive landscape, pressure on take rates, a transitioning business model and a need to deliver as well as management changes. Importantly though, PYPL has a strong pedigree, a dominant position in digital payments and a strong value proposition for both merchants and consumers. We believe there is a large margin of safety in the valuation and maintain an Add, albeit one that requires a degree of patience
Disc, I'm looking at adding. New ceo starting and buy back which is substantial. Turn a round story with some risk. Fintech out of favour.. Has been on a downtrend with a catalyst needed to boost the share price. Jim Cramer does not like it. Looks interesting but a lot more research needed