In it PayPalShares (NASDAQ:AMD) have had a mixed picture lately, and even over the past month. After the publication of the quarterly figures, the share certificates were corrected. But when it became clear that US inflation was on the way down, the stock rose again.
Ultimately, of course, foolish investors should consider whether PayPal stock is a business-oriented buy. Anyway, I have three possible reasons for you to think about.
PayPal stock: Solid growth, strong megatrend
For me, a key question about PayPal stock is: Should you bet against the megatrend of digital payment services? Recently, the market has focused on the fact that the market may be affected by a decrease in consumer interest. Although this is not a game changer for the market but for the general economy.
Digital payment services remain a growth market. The relative share of digital payments in global payment transactions still allows for further growth to be possible. In addition, PayPal continued to deliver revenue growth of 12% on a constant currency basis last quarter. For the full year 2022, management sees gains of approximately 10% on a constant currency basis. It shows me that both the market and the group as a whole continue to grow.
A strong ecosystem
PayPal stock also has a solid ecosystem behind it. If we look at the latest quarterly figures, the user base is 432 million. Additionally, this user group now processes $337 million in payment volume in a single quarter. The value amounts to one trillion US dollars per financial year.
PayPal is no longer an unknown company. But it is also an advantage that we can mention here. Millions of consumers around the world trust this name when choosing digital payment options. This means that the brand stands for trust, buyer protection and a secure process.
This is another advantage that the current starting position brings with it. When it comes to our money, we are not always open to new things. That should also apply to the majority of those 432 million users.
PayPal warehouse: Cheaper valuation
Finally, PayPal stock’s fundamental valuation is still slightly cheaper. With the stock price around $86, the price/sales ratio is likely to be less than 4. While the price/earnings ratio is likely to be around 39 in 2022. But on a 2021 basis, the value would fall to 25.
Anyway, I see a lot of value, solid growth opportunities and a strong ecosystem at a solid price. That is my investment thesis that I continue to hold.
Our best stock for 2022
There’s one company whose name is getting a lot of buzz from analysts at The Motley Fool these days. It’s for us THE best investment for 2022.
You could also benefit from that. To do this, you must first know everything about this unique company. So now we have one free special report prepared which introduces this company in detail.
Vincent owns shares in PayPal. The Motley Fool owns shares in and recommends PayPal Holding.