Here are some reasons why PayPal now at its current price and forward PE of 12 gives it a high growth potential as an investment:
Strong growth: PayPal has been growing its earnings at a compound annual growth rate (CAGR) of 20% over the past five years. This growth is expected to continue in the future, as the company continues to expand its reach into new markets and add new products and services.
Large addressable market: The global digital payments market is expected to grow from $3.5 trillion in 2021 to $7.4 trillion by 2025. PayPal is well-positioned to capture a significant share of this growth, as it is one of the leading global digital payments providers.
Strong competitive position: PayPal has a strong competitive position in the global digital payments market. The company has a large and growing user base, a strong brand, and a wide range of products and services.
Attractive valuation: PayPal is currently trading at a forward PE of 12. This is below the average PE for the S&P 500, which is currently trading at a forward PE of 17. This suggests that PayPal is undervalued, and that it could offer investors attractive returns in the future.
Overall, PayPal is a well-positioned company with strong growth potential. The company is expected to continue to grow its earnings at a rapid pace in the future, and it is well-positioned to capture a significant share of the growing global digital payments market. As a result, PayPal could offer investors attractive returns in the long term.
However, it is important to note that there are some risks associated with investing in PayPal. These risks include:
Competition: PayPal faces competition from other global digital payments providers, such as Visa and Mastercard.
Regulation: PayPal is subject to regulation in the countries in which it operates. Changes in regulation could impact the company's business.
Economic downturn: A global economic downturn could lead to a decline in consumer spending, which could impact PayPal's business.
Investors should carefully consider these risks before investing in PayPal.
Strong growth: PayPal has been growing its earnings at a compound annual growth rate (CAGR) of 20% over the past five years. This growth is expected to continue in the future, as the company continues to expand its reach into new markets and add new products and services.
Large addressable market: The global digital payments market is expected to grow from $3.5 trillion in 2021 to $7.4 trillion by 2025. PayPal is well-positioned to capture a significant share of this growth, as it is one of the leading global digital payments providers.
Strong competitive position: PayPal has a strong competitive position in the global digital payments market. The company has a large and growing user base, a strong brand, and a wide range of products and services.
Attractive valuation: PayPal is currently trading at a forward PE of 12. This is below the average PE for the S&P 500, which is currently trading at a forward PE of 17. This suggests that PayPal is undervalued, and that it could offer investors attractive returns in the future.
Overall, PayPal is a well-positioned company with strong growth potential. The company is expected to continue to grow its earnings at a rapid pace in the future, and it is well-positioned to capture a significant share of the growing global digital payments market. As a result, PayPal could offer investors attractive returns in the long term.
However, it is important to note that there are some risks associated with investing in PayPal. These risks include:
Competition: PayPal faces competition from other global digital payments providers, such as Visa and Mastercard.
Regulation: PayPal is subject to regulation in the countries in which it operates. Changes in regulation could impact the company's business.
Economic downturn: A global economic downturn could lead to a decline in consumer spending, which could impact PayPal's business.
Investors should carefully consider these risks before investing in PayPal.