PayPal: A Steal At Less Than 10x Earnings

PayPal delivered strong Q2 results, with 5% Y/Y revenue growth and robust free cash flow, supporting a 'Strong Buy' rating. PYPL's total payment volume rose 10% year-over-year, aided by Venmo expansion. Shares remain deeply undervalued at 9.8x forward earnings, despite a $53B takeover bid from Stripe and Advent International, which could potentially get raised. Projected $6.0B in stock buybacks and disciplined expense management further reinforce the investment case for PYPL.

PayPal (PYPL) reported better-than-expected earnings for its second fiscal quarter on Tuesday before the market opening, amid robust total payment volume growth, improving customer monetization, and an expansion specifically in Venmo-branded payment services.