PayPal's Easy Money Is Gone

Yiannis Zourmpanos 17.98K Followers Follow Summary PayPal’s $60.50/share takeover opportunity disappeared, leaving management’s standalone turnaround and margin recovery as the primary catalysts. Q2 TPV rose 10% to $486.45 billion, but transaction margin dollars increased just 1% to $3.9 billion. Venmo TPV grew 14%, PSP volume 13%, BNPL 26%, and Pay with Venmo surged 44% year-over-year. PayPal trades near 10x forward earnings, while consensus expects EPS growth to accelerate toward 9% by 2028–2029. Active accounts grew just 0.3%, while 7–8% OpEx growth and take rate compression threaten the expected earnings inflection. mihailomilovanovic/E+ via Getty Images Investment Thesis With the Stripe-Advent acquisition bid no longer in play, the success of PayPal Holdings, Inc. ( PYPL ) will now hang on execution alone. Since my last coverage , PYPL is up 18%, and I This article was written by Yiannis Zourmpanos 17.98K Followers Follow Hi, I'm Yiannis. Spotting winners before they break out is what I do best.Experience: Previously worked at Deloitte and KPMG in external/internal auditing and consulting. Education: Chartered Certified Accountant, Fellow Member of ACCA Global, with BSc and MSc degrees from U.K. business schools. Investment Style: Spotting high-potential winners before they break out, focusing on asymmetric opportunities (with at least upside potential of 3-5X outweighing the downside risk). By leveraging market inefficiencies and contrarian insights, we seek to maximize long-term compounding while protecting against capital impairment.Risk management is paramount—we seek a strong margin of safety to protect against capital impairment while maximizing long-term compounding. Our 2-3 year investment horizon allows us to ride out volatility, ensuring that patience, discipline, and intelligent capital allocation drive outsized returns over time. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.