Bargain Hunting? Buying PayPal In 2024 Makes Sense, But Only If You Believe This.

(CTN News) – With each passing day, it PayPal appears the major market indexes are reaching new all-time highs due to the outstanding performance of the so-called “Magnificent Seven” stocks. Bullish sentiment may make it difficult for investors to find attractive investment opportunities.

It is critical to note that not all companies rallied amid market enthusiasm. Look no further than PayPal (NASDAQ: PYPL). There has been an 81% decline in the digital payments pioneer’s share price from its peak. As the Nasdaq Composite index jumped 43% in 2023, it declined 14%.

However, this beaten-down fintech stock might just be the best investment for your portfolio in 2024 despite its terrible performance. Nevertheless, this is only true if you hold to one very critical belief.

Arguments that are aggressive

Based on the stock chart, PayPal is facing bankruptcy. There is no truth to that statement. As a matter of fact, this business remains successful.

PayPal reported revenue of $29.8 billion in 2023 and total payment volume of $1.5 trillion. It was a nice increase over the previous year for both. The company generated free cash flow of $4.2 billion, allowing the leadership team to buy back $5 billion of shares over the past 12 months. Clearly, these numbers do not reflect a struggling business.

PayPal is in a favorable competitive position. Thousands of millions of active accounts, consisting of both consumers and merchants, are responsible for creating its two-sided ecosystem. The result has been powerful network effects, whereby a greater number of users makes things more valuable to all stakeholders.

The fact that PayPal maintains relationships with both consumers and merchants also gives PayPal an advantage in terms of data. As a result, fraud can be detected more quickly and authorization rates are increased.

It is not uncommon for investors to be scratching their heads over how the company’s shares have performed. In the current market environment, PayPal’s stock trades at a forward price-to-earnings ratio of 11.4. At a discount to the broad S&P 500, this stock represents a good long-term investment opportunity.

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