
chameleonseye
Summary
- PayPal is set to benefit from a strong U.S. economy, with recent job reports showing better-than-expected growth and a 6.4% year-over-year pay increase.
- The company made strides in reducing operating costs, with a non-GAAP operating margin of 22.7% in Q1, and plans to grow its margin by >100 basis points in FY 2023.
- PYPL’s strong free cash flow and potential for stock buybacks, along with a discounted valuation compared to competitors, make it an attractive investment opportunity.
Last week’s jobs report showed that the U.S. economy may be able to avoid a recession altogether in 2023. PayPal (NASDAQ:PYPL) could be one company that benefits from a strong labor market as well as resilient consumer spending. Additionally, PayPal has potential to increase its stock buybacks, which would make sense since the fintech’s share trade for at a very low P/E ratio. Lastly, I see upside potential for PayPal as the fintech keeps cutting expenses and restructures its cost base and thereby improves its operating margin. For those reasons, I see PayPal as a serious rebound candidate!
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