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Why Is PayPal Stock So Cheap?

The company’s pivot to drive increased usage among existing users makes sense.

Andrew Willis Dec 16, 2022

Why Is PayPal Stock So Cheap?

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.

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Andrew Willis

Senior Editor

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Andrew Willis is senior editor for Morningstar Canada, covering stocks, alternative assets, funds, and personal finance. He is the writer and host of two weekly stock features, including Morningstar's Stock of the Week.

Willis previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor. He has also written for Thomson Reuters and CNN.

Willis holds a bachelor's degree in business administration from Bishop's University and a master's degree in journalism from the University of Hong Kong. Follow him on Twitter @Andrew_M_Willis.

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