That's why now is a great time to buy this growth stock.
For instance, the number of digital wallet users will double between 20, according to Juniper Research, and digital wallets will continue to take share at checkout (in both physical and digital settings) during that time period.Ĭurrently, shares trade at an inexpensive 4.1 times sales - an absolute bargain compared to the three-year average of 24.6 times sales. It puts its addressable market at $110 trillion, and its business should benefit greatly from the secular shift toward online shopping and digital payments. Going forward, PayPal still has plenty of room to grow. In the second quarter, PayPal continued to take market share across those categories, and CEO Dan Schulman said revenue growth reaccelerated to "north of 14%" in July. On that note, PayPal has refocused its growth strategy around three product categories where it has a tremendous competitive edge - the PayPal and Venmo digital wallets, PayPal Checkout, and Braintree (a more customizable checkout solution for large e-commerce companies) - and that shift in focus is already paying off. In fact, PayPal plans to double down on that advantage in the second half of the year by redesigning the shopping hub in its digital wallet. It can also boost sales for merchants by delivering personalized shopping deals to digital wallet users. For instance, PayPal can theoretically prevent fraud more effectively because it has access to data on both sides of most transactions. More broadly, PayPal operates a two-sided payments platform - offering financial services to both merchants and consumers - and that gives it an edge over traditional processors. Most notably, Pay with Venmo will go live on Amazon later this year. Better yet, studies have shown that PayPal boosts checkout conversion rates by 34% compared to other digital wallets, and that value proposition has helped it strike partnerships with numerous high-profile merchants. PayPal was the most downloaded finance app worldwide in the first half of 2022, according to Apptopia. But the headwinds related to eBay and high inflation are ultimately temporary, and the long-term investment thesis remains unchanged: Digital payments are becoming more popular, and PayPal is the most accepted digital wallet in North America and Europe. As result, revenue rose just 9% in the second quarter, and the company posted a GAAP loss of $0.29 per diluted share. PayPal has struggled over the past year, battling headwinds related to the loss of eBay's business and the difficult macroeconomic environment. PayPal: The most accepted digital wallet in North America and Europe