Paypal could flash a 10% earnings yield this year
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Paypal is expected to earn 4.95 eps this year 2023 and yet the stock is lagging the sp500. If risk avoidance returns in the sp500, it is possible that paypal underperforms further if the paypal downtrend continues.
However, wouldnt that be a value buying opportunity? if paypal reaches the 50 level and paypal continues to grow its earnings power (as analysts expect), the earnings yield on paypal would be around 10% earnings yield.
Value investors would be happy to consider a stock earnings 10% which at the moment is almost twice the treasury rates and twice the AAA corporate bond yields.
Growth investors might also find paypal meeting PEG ratio buy parameters, since analysts expect 15-18% growth annually.
If paypal weakens further, a 50 handle would be tempting. Analysts still show a 21 $ eps for for 2032 which could warrant a valuation for future 2032 between 400-600 per share in good times, 9-10 years from now.
However, wouldnt that be a value buying opportunity? if paypal reaches the 50 level and paypal continues to grow its earnings power (as analysts expect), the earnings yield on paypal would be around 10% earnings yield.
Value investors would be happy to consider a stock earnings 10% which at the moment is almost twice the treasury rates and twice the AAA corporate bond yields.
Growth investors might also find paypal meeting PEG ratio buy parameters, since analysts expect 15-18% growth annually.
If paypal weakens further, a 50 handle would be tempting. Analysts still show a 21 $ eps for for 2032 which could warrant a valuation for future 2032 between 400-600 per share in good times, 9-10 years from now.
Note
a good basket to track along with pypl, to see the downside risk, might be the financials and specifically the credit card issuers cof, jpm, bac, dfs, wfc, them seem to be trading roughly together. paypal does not have as much risk to credit as the others, but its being treated as though.Note
paypl pretty much hit the 10% earnings yield mark when it hit 50 ish $ per share.worst case risk if market weakens, in my opinion , could be 40s?
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