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Wyatt Flores
Wyatt Flores

How To Buy Paypal Stock

Shares of fintech pioneer PayPal Holdings (PYPL 0.28%) are down about 75% from their all-time high, but zooming out tells a different story. Ever since eBay spun off PayPal in 2015, the latter's stock has more than doubled in value. By comparison, the S&P 500 is only up about 90% during this time.

how to buy paypal stock

Management previously found ways to save $1.3 billion in 2023 and has since found $600 million more in savings. This means profitability is expected to improve in the coming year, which should be good for the stock.

Also in investors' favor, PayPal stock trades near its cheapest price ever. Its price-to-sales (P/S) ratio is about 3 -- far below its historical average. And its price-to-FCF ratio is about 17, which is quite reasonable.

To combine Schulman's thoughts with my own, PayPal has been a great business, and the stock is cheap. But to be a great investment from here, the company needs to grow, increase in relevance, and strengthen its competitive advantages. The new CEO, therefore, will need to have an accurate vision for the future.

As mentioned earlier, there's a lot to like about a PayPal investment. But for investors looking at its stock today, slowing growth and leadership changes place legitimate question marks on the business. Personally, I believe it's a stock to buy, and it's one that I continue to hold in my own portfolio. But it's far from a no-brainer today.

But PayPal would again become a public company in 2015 when it was spun off from eBay. PayPal began trading on the Nasdaq Stock Exchange on July 20, 2015, at about $41 per share. More than six years later, it has pretty much been on a rocket ship, with a total return of around 480% and an annualized return of roughly 31%, as of Oct. 28. The stock is currently trading at around $233 per share and, as the leader in the growing mobile payments industry, it should continue its robust growth. The good news for folks that don't have the capital to buy shares of this stock right now is that they can invest in PayPal for the cost of a penny stock through fractional shares investing.

PayPal has been one of the best growth stocks on the market over the past few years. The company is at the forefront of the digital payment revolution, as both merchants and consumers gradually move from cash to mobile and online payments. This trend has been accelerated by the pandemic, as more people shopped online and used contactless payment options. A 2020 study by Pew Research found that one-third of U.S. adults don't use cash during the week. That number will only grow over the next 10 years, 20 years, and beyond. According to Markets and Markets research, the global digital payments market is anticipated to grow at an annual rate of 14.2% between 2020 and 2025.

PayPal's stock price has shot up to around $233 per share since it went public a second time in 2015. For some investors, particularly those new to the space who may either be priced out of such a high entry point, or uncertain about allocating big chunks of capital to a stock right off the bat, fractional shares are a great option.

You could even treat it like a penny stock, investing just a few bucks to start, if you were so inclined. PayPal would be an excellent place to start as it is a market leader that still has huge growth potential in a booming industry.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends PayPal Holdings. The Motley Fool recommends Nasdaq and eBay and recommends the following options: long January 2022 $75 calls on PayPal Holdings and short October 2021 $70 calls on eBay. The Motley Fool has a disclosure policy.

Since being spun off from eBay in July 2015, PayPal (PYPL 0.28%) has seen its stock price rise 89%, despite falling 78% from its peak. A pioneer in the digital payments industry, PayPal has quickly expanded its standing as a popular checkout option for merchants and shoppers. And along the way, revenue and profits have increased at a steady clip.

Based on what I've outlined above, it's no wonder that the stock has taken a hit. Shares now trade at a price-to-earnings multiple of 35, which is well below the average of 51 since the company separated from eBay. Despite what might appear to be an attractive valuation, I'm not jumping to buy shares just yet.

Does this mean that these digital wallets are commoditized? I don't necessarily think so. PayPal does offer other features through its app, like rewards, bill pay, stock and crypto investing, and direct deposit. Plus, the company has Venmo, which management is still working to better monetize.

The takeaway for investors right now is not to panic and sell the stock. If you're a PayPal shareholder, it's best to keep an eye on trends with digital wallet usage. If the business can continue expanding its account base and TPV, then maybe my concerns are overblown. Therefore, the stock remains a hold, and possibly a buy for those who want to take advantage of a beaten-down price.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and PayPal. The Motley Fool recommends eBay and recommends the following options: long March 2023 $120 calls on Apple, short January 2023 $45 calls on eBay, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

A big part of learning how to buy Paypal stocks is finding the best place to make your investment. Paypal stocks are available to invest in through an online stock broker, and it usually takes just a few minutes to buy shares in Paypal when following our step by step guide.

The fees: There are no fees for stock trading. Skilling makes its money on the Bid/Ask spread, and stock spreads start from 0.9%. Positions left open overnight will be charged swap charges, which vary depending on the size of the trade.

We love AvaTrade because it offers powerful trading software to anyone who wants to trade professionally. AvaTrade is a CFD broker where you can trade more than 600 stocks from major global exchanges and all stock trades are commission free.

This indicator should be used when you research Paypal to help you decide whether to buy Paypal shares. Past performance is no guarantee of future results. It is not investment advice or a recommendation from Invezz to buy this stock.

Yes, you can invest in Paypal stock in a few different ways. One option is to buy stock in Paypal directly through an investment platform as laid out above, while another popular choice is to invest in a fund.

Things haven't looked good for PayPal (PYPL 0.28%) lately. After being spun off from eBay in July 2015, the stock skyrocketed 740% to reach its all-time high of $308.53 on July 23, 2021. Since then, however, shares are down a whopping 76% (as of this writing). Macro headwinds have led to a business slowdown, as well as waning investor enthusiasm.

What's attractive about PayPal from an investment standpoint is that this company generates lots of free cash flow (FCF). Because capital expenditures are minimal, averaging 3.4% of overall annual revenue over the past three years, cumulative FCF over the past 36 months totaled $17.8 billion. This has allowed the business to repurchase its shares. In 2023, management plans to use 75% of FCF to buy back its stock.

Right now, shares are trading at a price-to-earnings ratio of 36, which is well below the stock's historical average valuation. For investors looking for an industry-leading enterprise with strong profitability that is benefiting from secular trends, it's hard to ignore PayPal.

American Express is an advertising partner of The Ascent, a Motley Fool company. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends eBay and recommends the following options: short April 2023 $52.50 calls on eBay and short April 2023 $70 puts on PayPal. The Motley Fool has a disclosure policy.

However, what goes up must come down. This fintech trailblazer has been dealing with macroeconomic weakness in recent quarters, with inflation hurting discretionary spending on its network and higher interest rates helping to drive down the share price. But with the stock now down 72% from its all-time high and 51% in the past 12 months, is PayPal a buy right now?

What's more, because the company's business model is extremely capital-light, free cash flow soared 37% to total $1.8 billion in the most recent quarter. Being a perennial cash machine has afforded the company's leadership team the ability to return excess capital to shareholders through consistent share buybacks. Since the start of 2016 through Sept. 30 last year, $15.1 billion of PayPal stock has been repurchased, which translates to 15% of the current market cap. Another $1 billion of buybacks is expected in the fourth quarter.

Those previously mentioned positive traits are certainly enough to convince anyone of PayPal's attractiveness as an investment candidate. But when it comes to looking at stocks to potentially buy, assessing a particular company's qualitative characteristics is only half the battle. The other part of the equation deals with valuation.

As of Feb. 1, PayPal's stock traded at a price-to-earnings (P/E) ratio of 44. To be fair, this is cheaper than the stock's trailing three-, five-, and 10-year average P/E multiples. However, that current valuation is still a steep price to pay for a business that is only projected to increase its free cash flow at a 12.2% compound annual growth rate between 2022 and 2026, according to Wall Street consensus analyst estimates.

With the Internet-Software Industry currently in the top 28% of over 250 Zacks Industries one stock investors will be paying close attention to is PayPal (PYPL Quick QuotePYPL - Free Report) ) which is set to report its fourth-quarter earnings on Thursday, February 9 and still trades 36% from its 52-highs. 041b061a72


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