Why Is PayPal Stock So Cheap?
The company’s pivot to drive increased usage among existing users makes sense.
Andrew Willis: Diversified tech giants Google GOOG, Apple AAPL, and Alibaba BABA have all gotten into the payment processing game, so how will the relatively small fish PayPal PYPL stand a chance at surviving as a common digital wallet?
For one, PayPal users don’t seem to want to switch. In fact, transaction volumes per account grew 13% year over year in Q3, and senior equity analyst Brett Horn thinks the company’s pivot to drive increased usage among existing users makes sense.
We think PayPal will remain a preferred partner in the online world given its convenience and security, with its offering on both the consumer and merchant side of transactions. Management did suggest it is taking a more cautious outlook on the macro environment and lowered its revenue expectations for next year—but not long before we had a record-breaking Black Friday.
For Morningstar, I’m Andrew Willis.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.