PYPL At Price Support Zone, Right Time To Buy?
PayPal (PYPL) should be on your watchlist. Here is why – it is currently trading in the support zone ($65.77 – $72.69), levels from which it has bounced meaningfully before. In the last 10 years, the stock received buying interest at this level 9 times and subsequently went on to generate 54.9% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 10/12/2017 | 24.1% | 106 |
| 2/8/2018 | 15.2% | 34 |
| 4/25/2018 | 316.9% | 1185 |
| 6/23/2022 | 38.3% | 54 |
| 12/28/2022 | 28.7% | 36 |
| 6/20/2023 | 10.1% | 41 |
| 8/15/2024 | 35.1% | 155 |
| 5/2/2025 | 11.3% | 41 |
| 6/18/2025 | 14.1% | 40 |
But is the price action enough alone? It certainly helps if the fundamentals check out. For PYPL Read Buy or Sell PYPL Stock to see how convincing this buy opportunity might be.
Here are some quick data points:
- Revenue Growth: 4.1% LTM and 7.0% last 3 year average.
- Cash Generation: Nearly 16.4% free cash flow margin and 19.1% operating margin LTM.
- Recent Revenue Shocks: The minnimum annual revenue growth in last 3 years for PYPL was 4.1%.
- Valuation: PYPL trades at a PE multiple of 14.2
- Opportunity vs S&P: Compared to S&P, you get lower valuation, higher 3 year average revenue growth, and better margins
PayPal provides a technology platform enabling digital payments for merchants and consumers across approximately 200 markets and 100 currencies worldwide.
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| PYPL | S&P Median | |
|---|---|---|
| Sector | Financials | – |
| Industry | Transaction & Payment Processing Services | – |
| PE Ratio | 14.2 | 23.5 |
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| LTM* Revenue Growth | 4.1% | 5.0% |
| 3Y Average Annual Revenue Growth | 7.0% | 5.8% |
| Min Annual Revenue Growth Last 3Y | 4.1% | -0.3% |
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| LTM* Operating Margin | 19.1% | 18.8% |
| 3Y Average Operating Margin | 17.8% | 17.7% |
| LTM* Free Cash Flow Margin | 16.4% | 13.2% |
*LTM: Last Twelve Months
That is one way to look at stocks. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
What Is Stock-Specific Risk If The Market Crashes?
That said, PayPal isn’t immune to big sell-offs. It fell about 20% during both the 2018 correction and the Covid crash. The inflation shock hit even harder, with a drop over 41%. Even with solid fundamentals, steep pullbacks can happen when the market turns south. So, risk is definitely still there.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read PYPL Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.