Jump to content



Photo

PAYPAL: falling knife catch anyone


  • Please log in to reply
5 replies to this topic

#1 dougie

dougie

    Member

  • Traders-Talk User
  • 8,193 posts

Posted 10 June 2022 - 05:09 PM

https://www.tradingv...com/x/jMNeBWtp/

 

has to be some value in here soon. Unless its model is dead?


Edited by dougie, 10 June 2022 - 05:10 PM.


#2 Rich C

Rich C

    Member

  • Traders-Talk User
  • 301 posts

Posted 10 June 2022 - 09:08 PM

I use Paypal when ordering online, if the vendor takes it.  I don't want to put my credit card number out there any more than I have to.  But, I probably use it once or twice a month.  I don't buy that much online.  I don't think the model is dead because credit card security seems important, but I think the uptake has been smaller than the market expected.  I don't see Paypal advertising what their service does.  That might get some new customers for them.  Maybe they should buy some FB adds.

 

I have a significant loss on the stock.


Blogging at http://RichInvesting.wordpress.com

 

My swing trades typically last a couple of weeks to a couple of months. 


#3 Douglas

Douglas

    Member

  • Traders-Talk User
  • 1,509 posts

Posted 11 June 2022 - 02:12 AM

I use Paypal for the same reason as Rich C, so I'm a fan too.  The stock got a big boost in trade during the pandemic as everyone including me turned to on-line shopping in a big way to avoid going to stores.  The earnings and the stock price peaked at the peak in the pandemic and have been heading south ever since. 

 

According to Finance.yahoo.com the average forecast is for Paypal to earn $3.89 this year and $4.83 next year which equates to about a 24% growth rate, assuming a P/E equal to the growth rate gives you a current stock price of $3.89 x 24 = $93.36.  The high last week was $89.32, so in that ball park.  So by this analysis it's roughly fairly valued. 

 

Assuming Paypal returns to the crude trend line growth rate that I show below in red, the earnings will double roughly every 4 years.  By the rule of 72 that means that Paypal longer term appears to have roughly an 18% annual earning growth rate, not the faster 24% forecast by yahoo finance.  If this lower growth rate is correct, then the stock price has a ways to fall since using an 18 PE and a PEG of 1 produces a stock price of (18 x $3.89) = $70.02.  So which growth rate do you believe and what PEG do you think is acceptable?  

 

t5Amkam.png

 

Regards,

Douglas



#4 K Wave

K Wave

    Member

  • Traders-Talk User
  • 13,123 posts

Posted 11 June 2022 - 12:27 PM

Methinks some folks don't get that an epic bubble has just popped....

 

Same thing happened in 2000..I literally begged people to sell their stock option shares back then before the real damage hit, but not a one listened..

 

I think this one is worse though....as we have the 40 year turn in interest rates on our hands...so much bigger headwinds than Y2K...

 

Just waiting for the remaining Mega Caps to break hard, and then everyone will see....but way too late for the early crash and burns like PYPL NFLX ARKK etc...

Just like in 2000, the early crashes started in Jan-Mar 2000, and others held out until Jul-Sep before crashin' and burnin'...but they ALL came down big...

 

Still thinkin' once the criminally insane BOJ gives up trying to fight the market, or they are simply forced to...by the market, could be when the real chaos begins in earnest...

Last week was first weekly close actually above the 0.25 target....so could happen soon...


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#5 K Wave

K Wave

    Member

  • Traders-Talk User
  • 13,123 posts

Posted 11 June 2022 - 12:39 PM

This is what a typical bubble bust aftermath looks like.

 

I do not expect that PYPL will be that much different.

 

1998 equates to the Corona Panic low, and then the huge bubble run, followed by the inevitable bust.

 

Corning 2000

 

glw.png

 

PYPL today

 

pypl.png

 

 

 

 


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#6 pdx5

pdx5

    I want return OF my money more than return ON my money

  • Traders-Talk User
  • 8,565 posts

Posted 11 June 2022 - 12:40 PM

Methinks some folks don't get that an epic bubble has just popped....

 

Same thing happened in 2000..I literally begged people to sell their stock option shares back then before the real damage hit, but not a one listened..

 

I think this one is worse though....as we have the 40 year turn in interest rates on our hands...so much bigger headwinds than Y2K...

 

Just waiting for the remaining Mega Caps to break hard, and then everyone will see....but way too late for the early crash and burns like PYPL NFLX ARKK etc...

Just like in 2000, the early crashes started in Jan-Mar 2000, and others held out until Jul-Sep before crashin' and burnin'...but they ALL came down big...

 

Still thinkin' once the criminally insane BOJ gives up trying to fight the market, or they are simply forced to...by the market, could be when the real chaos begins in earnest...

Last week was first weekly close actually above the 0.25 target....so could happen soon...

Does that mean no more watching the sky for several months? 


"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule