![]() PayPal's valuation is high and the stock more than doubled after the pandemic, which somewhat caps your upside. If you look at 2022 earnings estimates, the company is expected to earn about $5.90, or 43x 2022 earnings. PayPal is expected to earn $ 4., which is about a 54x earnings multiple. PayPal earned about $ 3.55 in diluted earnings in 2020, so the stock traded for about 41x earnings. Now PYPL is significantly higher in price, so it's worth comparing the multiple then to now. Last year, I named PYPL as my top stock pick of 2020, figuring that e-commerce would boom and inflation would result from the pandemic. Like the NASDAQ, PayPal is still highly valued right now, but the strength of their business means that there is a price I would like to buy. With PayPal down about 20 percent off of its all-time high, it's worth digging into the fundamentals to see where these funny knee-jerk correlations could lead to opportunities for you. But that's not how the market has been working lately, to the point where a while after the pandemic started, the NASDAQ and Dow became negatively correlated.ĭoes this make sense? Maybe not in the long run, and it implies that there could be opportunities in the market at the right price. ![]() PayPal makes money off of transaction volumes and from interest on customer balances (through the PayPal side of the business and through Venmo), and theoretically could be worth more in an inflationary and/or higher rate environment. Take PayPal Holdings ( NASDAQ: PYPL ), for example. But the correlations can lead to some funny outcomes that are worth more research. ![]() With many NASDAQ names trading over 50x earnings, this makes sense. There has been plenty of ink spilled lately over " long-duration stocks," with the idea being that popular NASDAQ growth stocks are projected to get much of their growth in the far future, so they're reflexively sold whenever rates and/or inflation expectations climb. ![]() JasonDoiy/iStock Unreleased via Getty Images ![]()
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