Readers often ask about PayPal (PYPL). Shares of the fintech company have fallen significantly recently. Can you get a cheap entry into the future of the money economy here?
PayPal: Get in Now?
The company revealed a few weeks ago that it will not reach its own medium-term goals. It wanted to have 750 million accounts in its portfolio by 2025. According to its own statements, this is no longer feasible.
Markets reacted with shock, sending the stock down more than 40% in four weeks. The price-to-earnings ratio (P/E) is currently back at around 32, which is a fair, if not favorable valuation in the fintech sector.
In the past few days, the share has gained a good 5%. That is why many analysts are now paying attention to the stock again. PayPal could actually be interesting in the long term. It’s currently looking to expand its “buy now, pay later” business, which promises immense growth.
The Key Question: How Much Patience Do You Have?
Analysts are already projecting that the stock will reach old highs again – or at least approach them. My current assessment: to invest in PayPal, you need patience.
Despite the probably exaggerated losses, it does not look as if the financial markets will immediately lift the share back to its old highs. There is also still some question as to how users will react to higher interest rates, which will set in in a few weeks. The “buy now, pay later” business in particular could be weaker than expected.
The P/E is also not so low that the stock would necessarily be a bargain, and there will be no dividend for 2022. Therefore, I would be cautious despite the gains in recent days. In the financial sector, I currently clearly prefer the insurance companies, which have lost value in the past few days. Allianz (ALIZY) offers a dividend yield of close to 5%.
