PayPal No Longer Deserves A Premium Valuation. Here's Why.
PayPal isn't climbing out of the 80%-plus decline it has endured over the past five years.
PayPal No Longer Deserves A Premium Valuation. Here's Why.
Overview
PayPal's (NASDAQ: PYPL) share price has stumbled by more than 25% year to date, and the stock now trades at a P/E ratio of 8. However, that doesn't make it a buy right away, and it may never climb to a lofty P/E ratio now that the growth narrative is mostly dead.
PayPal delivered 7% year-over-year revenue growth in the first quarter, which is well below that of emerging fintech stocks like SoFi Technologies (up 41% in Q1) and Robinhood Markets (up 15%). PayPal's revenue compound annual growth rate (CAGR) has been declining in recent years. It has a 10-year CAGR of 13.9%, but only a 7.2% CAGR over the past three years.
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Originally published at www.fool.com.
