PayPal (NASDAQ: PYPL) has been a turnaround investment opportunity for some time, with investors eagerly waiting for the stock to bounce back. The recent first-quarter results have shown promising signs of a potential rally, making PayPal a no-brainer buy for many.
Despite a significant decline in its stock price over the past year, PayPal has been actively working on transforming its business under the leadership of new CEO Alex Chriss. The company’s operating margin in Q1 was close to its highest in years, indicating improved efficiency.
Moreover, PayPal’s products continue to see strong use, with total payment volume rising 14% year over year to $404 billion. Revenue from that total also increased by 9% to $7.7 billion, leading to an 18% growth in earnings per share.
While the market response to PayPal’s strong performance was a 2% drop in its stock price, the valuation of the company remains attractive. Trading at about 16 times earnings, PayPal is considered undervalued compared to the broader market.
With the potential for further growth and improvement in the business, PayPal’s stock presents a compelling investment opportunity. Despite not being included in the Motley Fool’s list of top 10 stocks, PayPal’s turnaround story and growth prospects make it a stock worth considering for investors looking for long-term gains.
Investors should take note of the potential upside in PayPal’s stock and consider the company’s strong performance in the first quarter as a sign of things to come. As the market catches up to the growth potential of PayPal, the stock could see a significant rally in the near future.
