Why is PayPal stock so expensive? The answer isn’t obvious, but combined with its huge growth, boom-and-bust market cycle and some of the most powerful investors in the world, it’s enough to make you want to sell your PayPal stock. As of this writing, PayPal stock has a market cap of $46 billion. That’s a lot of money, but is it worth it? Let’s dig into the stock price and see if it’s worth your time.
What is PayPal Stock?
PayPal is a buyer-beware company. Its main function is to take money from people and send it to others. It does this by using electronic cash and an electronic network to move funds between people. The company owns and operates the payment platform, but it doesn’t own the money that moves through the network. That’s up to the sellers and the buyers of the goods and services. The people who use PayPal have a lot of trust to have in it. That’s because PayPal has been around since eBay launched back in 1995. At that time, it was a convenient way to enter the online marketplace.
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How to Buy PayPal
The primary way to get in on the action with PayPal is to purchase its stock. In an initial public offering (IPO) in 2014, shares sold at $45 apiece, opening the door for investment at a price tag of $72. That IPO made PayPal one of the most expensive stocks in the market, but it got even more expensive in 2018. In that year, shares reached a high of $120 apiece. This was more than double the IPO price and far more than the company’s earnings were likely to justify. Today, shares are back to basics, trading modestly in the $70s. For a company with the size and growth potential of PayPal, that’s a bit of a letdown. But it’s also a sign that investors are wary of the risks of the industry. There’s no need for investors to be like the crowd, though. You can buy shares in PayPal as a way to get exposure to its most prominent function.
PayPal’s Growth Spurt
In the early years of the Internet, eBay was the king. That’s where you’d go to buy and sell goods and services. But PayPal quickly became one of the most important parts of the eBay ecosystem. PayPal’s role is to act as the link between sellers and buyers. It facilitates transactions, which makes it critical to the functioning of the online marketplace. The eBay IPO in 1999 made PayPal one of the largest companies in the world. Over the next decade, the company grew at a rate of almost 25% annually. The growth spurt abruptly came to an end in 2015. In that year, PayPal reported an operating loss of $3.6 billion. It wasn’t clear what had happened at the time, but it was clear that something had. The operating loss in 2015 marked the end of an era. It was the last year that PayPal made money from the sale of goods and services. The company has since focused on its primary function: taking money from people and sending it to others. In 2015, the company was worth $109 billion. By 2025, the company’s market cap is expected to reach $126 billion. The company’s growth potential is clear, but it’s important to remember that the market has a habit of throwing up price bubbles. The prices are possible because the market is betting that PayPal’s growth potential is enormous. Investors have a habit of underestimating the risks of this growth, though. In particular, investors should take a closer look at the company’s business model.
PayPal’s Disruptive Technology
PayPal is a pioneer in the field of Internet payments and one of the best stocks to buy now. As far back as 1995, it was showing the advantages of online financial services. But the company has continually sought to improve on those original innovations. The most notable example of this is PayPal’s community policing program. The program is meant to address the issues that often come up when large volumes of transactions are made over the Internet. In particular, the company has taken on the problem of cybercrime. The company has found new and innovative ways to fight back against scammers and other criminals who would take advantage of the company’s platform. The company has also been working to make its platform more accessible to more people. This is a priority for the company since it’s trying to grow its user base. The most notable element of PayPal’s accessibility projects is the launch of an Android app. This app allows blind and visually impaired people to use PayPal through text or a screen reader.
PayPal stock forecast for 2022-2025
As with every investment, it’s important to do your research before committing money to a stock. That way, you can make sure you’re invested in a company that will be around for the long haul. In this section, we take a look at the growth potential and investment value of PayPal stock from 2022-2025. We’ll start by looking at its revenue projections. We’ll then move on to its earnings projections and valuation analysis. We’ll wrap up by looking at the stock price to get a sense of whether or not it’s worth investing in today. – Projected revenue: $86.8 billion – Projected EPS (earnings per share): $7.31 – Average price earnings estimate: $72 – Market cap (price per share): $48.7 billion
Bottom line
PayPal has achieved remarkable growth as a money-changing platform. It has weathered many storms, including a price collapse in 2018 and changing consumer behavior. That growth has given investors a lot of potential reward, but that potential comes with a lot of risk. As investors should always do, they should look at the long-term growth potential of a company before diving in. Paypal stock looks like a good bet for risk-takers who like to take risks with money. However, it’s important to remember that PayPal is a volatile stock. It could fall even farther in the future, and it could fall hard. Paypal is a risky bet that investors shouldn’t make.
