PAYPAL WKN: A14R7U ISIN: US70450Y1038 Forum: Aktien Thema: Hauptdiskussion

Braintree experienced a greater than 30% revenue growth from 2021 to 2023. PayPal CEO Alex Chriss remarked that they priced aggressively to gain market share, which serves as a beachhead in this segment. They are now in a position to add more value to their offerings. Thus increasing their price to value. On unbranded, this is a processing business that we have established growth in and established a beachhead in over the last few years. But now is the time for us to take all that great innovation, the value-added services, the proof points that we put into the market and price to value and ensure that we're driving profitable growth from a processing business as well. You add on top of that new innovation that we brought to market, things like Fastlane, that enable us to now delight customers with best-in-class checkout conversion experience. And we believe that's a wonderful opportunity to monetize. While this may turn out to be true, it doesn't change the fact that Braintree's high growth rate and PayPal's core payment stagnation resulted in PayPal's consolidated gross margin declining from 55.17% to 46%.

Declining Gross Margin PayPal experienced a gross margin decline from 2021 to 2023, which resulted in the stock price plunging by 80% since peaking in 2021. Former PayPal CEO Dan Schulman attributed this to the increasing percentage of revenue from its unbranded checkout business, which mostly comes from Braintree, pressure on discretionary spending due to elevated inflation, and the slowing growth of E-Commerce transactions due to the easing of COVID restrictions. While these factors, excluding Braintree, will continue to be a significant headwind for PayPal. They are expected to correct themselves as the economic cycle normalizes. We will instead focus on Braintree since this is where PayPal has control. No public records of Braintree's financial performance are available. Still, we will rely on a Forbes article and PayPal investor presentation to estimate its revenue, gross margin, and percentage of Braintree's revenue into PayPal's total revenue.

Fast Lane With 60% of online purchases still done on 'Guest Checkout,' PayPal introduced 'Fast Lane,' aiming to provide a more frictionless transaction. This feature takes advantage of customers who have used PayPal once during their past purchases to fill out their payment details automatically, resulting in more seamless transactions that provide a tremendous value proposition for merchants wanting to increase their checkout conversation among customers who want to keep their debit or credit card information private and customers who wish to have a smooth guest checkout experience. According to research done by Baymard, 25% and 22% of the consumers abandoned during the checkout process due to not wanting to provide credit card information and the complicated checkout process, respectively. PayPal Fast Lane can provide a solution that is on par or better than the competition. While I believe Fast Lane isn't the "Breakthrough Innovation" that convincingly beats the competition and can gain market share, it provides the sustaining innovation PayPal needs to protect its market share against other fintech and big tech trying to steal market share from them by providing an even more frictionless online payment experience. By enticing customers with rewards, PayPal is also leveraging Fast Lane to onboard consumers who want to avoid logging in to their PayPal account. PayPal CEO Alex Chriss comments on how they will leverage Fast Lane to onboard customers on their platform at the Morgan Stanley Technology, Media & Telecom Conference. What that does from a branded perspective, though, is that now allows us to follow up with that customer and say, "Hey, thank you for purchasing and doing the guest checkout through Fastlane. Did you know that if you actually used PayPal, you could have saved 2% or you could have gotten this reward?" This is a smart move by PayPal; they are leveraging their innovation to onboard potential consumers onto their platforms, benefiting their advertising business.

PayPal Advertising Business PayPal is processing approximately $1.5 trillion in transactions annually on its platform. Along with its huge data on customer's buying behavior and merchants' offerings, it is in a prime position to enter the digital advertising market. With its 426 million active accounts and 36 million merchants in over 165 countries transacting inside its platform, It already has the required scale needed to make this business economically viable cause it no longer has to spend so much money trying to acquire new customers. With digital advertising costs continuing to increase in recent years, merchants are trying to find alternative advertising channels, such as retail media. PayPal is in a prime position to take advantage of this trend and is leveraging all the data being processed on its platform by introducing 'Smart Receipts,' where they leverage AI to analyze the customers' buying history or patterns and recommend products on its receipts through email or app, in which the customer might have a particular interest. Additionally, they have introduced PayPal's Advanced Offer Platform; similar to how Meta (META) or Google (GOOG) handles its advertising business, PayPal is again leveraging AI to provide recommendations to consumers based on their buying patterns. For example, if you have historically purchased luxury beauty products, PayPal will recommend a product based on your buying interest. Moreover, unlike Google and Meta, they will charge merchants for advertisements based on performance, not impressions, providing tremendous value proposition for merchants trying to find other advertising channels. Lastly, PayPal can benefit from the 'Network Effect' as they scale this business. Digital Advertising is forecasted to grow at 9.1% CAGR; PayPal, along with its high growth payment business potential, can tap into another high growth market.

New Management, Refocusing PayPal PayPal has gone on an acquisition spree to improve its payment service, from Coupon to Logistics. However, these acquisitions have contributed little to what customers want from PayPal: secure and frictionless transactions between merchants and consumers. After its acquisition spree, the company did too many things at a time instead of focusing on sustaining innovation, such as improving its branded checkout experience by making it more seamless or frictionless. PayPal's New CEO, Alex Chriss, acknowledged this in his interview at the Morgan Stanley Technology, Media & Telecom Conference last March 4, 2024. I'll tell you a story. I started September 27. That was a Board meeting week. The week after, I've gathered all of our product leaders in Austin for a product review. We sat down. It was a three-day review. Four hours in, I stopped the meeting because we were reviewing 300 different items. And I said, "Not all of these are created equal. It's time for us to focus." Dedicated to refocusing PayPal on its core competence, PayPal's new management divested and is looking to divest some of these acquisitions. Alex Chriss remarks when asked how PayPal plans to improve its Transaction margin growth. Then we have another component of really other products and services that we have that are a drag to the business. These are a combination of acquisitions that we've done over the course of the year, products that have been defocused and were, in many ways, orphaned throughout the organization. And we're now looking at top to bottom as a leadership team and understanding, are they core to the business? Are they places that we should invest in? Are they areas that we should divest because they're just not core anymore and they're boat anchors to the business? And we will address those over the course of the year. PayPal recently sold Happy Returns, a logistics company, to UPS (UPS), which indicates that it will sell any businesses that are dragging PayPal's profitability and don't contribute additional value to PayPal's payment service. I expect further divestment or restructuring of some of the acquisitions, now subsidiaries of PayPal, as the management continues refocusing its business to its core competence, which can improve PayPal's profitability. Additionally, the new management will be particularly motivated as their stock compensation will be granted during a period of low valuation for a high-growth company like PayPal. Consequently, they have a solid incentive to improve PayPal's profitability and growth.

Investment thesis Financial Institution inefficiency, digitalization, and regulation, such as PSD2, led to the explosive growth of fintech, which proliferated into payments, insurance, asset and wealth management, and real estate. PayPal Holdings Inc. (NASDAQ:PYPL), the leading US fintech payment company, benefitted from this industry development by providing a secure and frictionless payment experience. With competitors such as banks, big tech, and other fintech companies eager to grab a slice of this fintech segment, PayPal is at a crucial inflection point. It needs to respond or risk losing market share to its competitors. The new management and its strategy to refocus PayPal on its core competence, emphasizing profitable growth, and PayPal's stock selling at a 25% discount convinced me that PayPal is an excellent profitable growth stock you can buy right now.

PayPal: An Undervalued Profitable Growth Stock Summary PayPal's new management is refocusing the business to improve profitability. PayPal is diversifying into digital advertising and is in a prime position as merchants try to find alternative advertising channels. Fastlane can be the sustainable innovation PayPal needs to protect its market share against the competition. Unbranded business is a drag on PayPal's margin, but things can turn around as PayPal turns its attention towards Small and Medium businesses. PayPal's new management will emphasize profitable growth as the payment segment consolidates.

Gerne

kannst du den artikel ganz rein stellen bitte?

https://seekingalpha.com/article/4703863-paypal-an-undervalued-profitable-growth-stock?mailingid=36050918&messageid=must_reads&serial=36050918.2209580&source=email_must_reads&utm_campaign=Must%2BReads%2Brecurring%2B2024-07-13&utm_content=seeking_alpha&utm_medium=email&utm_source=seeking_alpha&utm_term=must_reads Der Abschnitt gefällt mir am besten: While I believe Fast Lane isn't the "Breakthrough Innovation" that convincingly beats the competition and can gain market share, it provides the sustaining innovation PayPal needs to protect its market share against other fintech and big tech trying to steal market share from them by providing an even more frictionless online payment experience.

Ja ist ganz nett

die Wartezeit Richtung Norden ist zu Ende-nur ein Weltkrieg kann dies ändern 🤔

Gute News https://www.chip.de/news/PayPal-Umstellung-ab-August-Was-sich-fuer-Kunden-aendert_185361706.html

Noch einer mit Maske 😷 https://youtu.be/r2hBwMQ7eaI?si=Xq-2iL7ODFiOOaFS