Vladyslav Koptiev @AtlasCapital: "$PYPL 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗺𝗼𝗱𝗲𝗹 Sharing..."

Malta

$PYPL (PayPal Holdings) 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗺𝗼𝗱𝗲𝗹 Sharing with all of you my carefully crafted DCF model for Paypal. Do not forget to hit the like button if you find it useful. Valuation suggests that the stock is trading at 18% discount to fair value. If adjusted to FV within 3 years, it will generate an annual alpha ~ 7%. 𝗞𝗲𝘆 𝗮𝘀𝘀𝘂𝗺𝗽𝘁𝗶𝗼𝗻𝘀: 1) Explicit 5Y growth @ 6%, subsequently 4% until reaching the perpetuity stage in 2035. From 2016 to 2021, PayPal delivered strong double-digit revenue growth, averaging 15–20% annually, driven by rising transaction volumes, global expansion, and pandemic-era e-commerce tailwinds. However, since 2022 growth has slowed considerably, dropping to the high single digits (~8–9% in 2022–23) and further moderating to ~6–7% in 2024, reflecting PayPal’s larger scale, normalization post-pandemic, and intensifying competition from players like Stripe, Adyen, and Apple Pay. Over the past five years, PayPal’s CAGR sits around 12–13%, but recent trends suggest a shift toward a more mature phase with mid-single-digit growth unless new initiatives, such as partnerships and interoperability efforts, reignite momentum. 2) Long-term growth in perpetuity @ 3% (GDP growth for developed economies) 3) WACC @ 9.1% 4) An EBITDA exit multiple of 10. This was a bit challenging to find for a mature payment provider (which I expect PayPal to be after a decade). I believe this level will be a fair relative valuation. 𝗪𝗵𝘆 𝗜 𝗯𝗲𝗹𝗶𝗲𝘃𝗲 𝗶𝘁 𝗰𝗮𝗻 𝘄𝗼𝗿𝗸 𝗼𝘂𝘁 𝘄𝗲𝗹𝗹 a) Partnership Catalysts b) Resilient Core Business c) Buybacks at Attractive Levels. d) Stabilizing Growth Profile e) Margin expansion Opportunities f) Relative Valuation Appeal. g) Secular Tailwinds h) Recent improvements in ROIC 𝗪𝗵𝗮𝘁 𝗰𝗮𝗻 𝗴𝗼 𝘄𝗿𝗼𝗻𝗴 a) Growth Stagnation b) Competitive Pressures c) Margin Compression d) Execution Risk on Partnerships e) Regulatory & Legal Risks f) Capital Allocation Missteps g) Macro Sensitivity h) Valuation Trap 𝗦𝗲𝗻𝘀𝗶𝘁𝗶𝘃𝗶𝘁𝘆 If you disagree with this model on certain aspects, you can choose your own assumptions using the tables below. I encourage you to be constructive if you are willing to criticise my model. Base case + Bear case + Bull case ⬇️ Sensitivity table ⬇️ 𝗖𝗼𝗻𝗰𝗹𝘂𝘀𝗶𝗼𝗻: shares undervalued, but remember about the risks and do not overexpose your portfolio to PYPL. Keep in mind, this is an estimate—just like any DCF model. I’m not claiming perfection, but I do trust these calculations to guide my own investments. Hopefully, they can help inform yours as well. If you choose to share it online, please credit my page as the source. _____________________________________________ 💰 𝙈𝙮 𝙥𝙤𝙧𝙩𝙛𝙤𝙡𝙞𝙤 𝙙𝙚𝙡𝙞𝙫𝙚𝙧𝙚𝙙 𝟮𝟐% 𝙖𝙫𝙚𝙧𝙖𝙜𝙚 𝙖𝙣𝙣𝙪𝙖𝙡 𝙧𝙚𝙩𝙪𝙧𝙣 𝙨𝙞𝙣𝙘𝙚 𝟮𝟬𝟭𝟴. 📌 𝗖𝗼𝗽𝘆 𝗔𝘁𝗹𝗮𝘀𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝘁𝗼𝗱𝗮𝘆 𝘁𝗼 𝗯𝗲𝗻𝗲𝗳𝗶𝘁 𝗳𝗿𝗼𝗺 𝗳𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹𝘀-𝗯𝗮𝘀𝗲𝗱 𝗱𝘆𝗻𝗮𝗺𝗶𝗰 𝗮𝘀𝘀𝗲𝘁 𝗮𝗹𝗹𝗼𝗰𝗮𝘁𝗶𝗼𝗻. etoro.tw/3AsaBiH ✅ 💼 𝗟𝗲𝘁 𝘁𝗵𝗲 𝗲𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲𝗱 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗺𝗮𝗻𝗮𝗴𝗲𝗿 𝗵𝗮𝗻𝗱𝗹𝗲 𝘁𝗵𝗲 𝘄𝗼𝗿𝗸, 𝘄𝗵𝗶𝗹𝘀𝘁 𝘆𝗼𝘂 𝗲𝗻𝗷𝗼𝘆 𝗹𝗶𝗳𝗲. *Past performance does not guarantee future results $SPX $VOO (Vanguard S&P 500 ETF) $VGT (Vanguard Information Technology) $BTC

4 Mentioned

PYPL

PayPal Holdings

VOO

Vanguard S&P 500 ETF

VGT

Vanguard Information Technology

BTC

Bitcoin

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