Fintech

Executive Summary Investment Thesis: PayPal pioneered digital payments and remains the #1 global platform with 426M active accounts processing $1.5T annually. The business generates fortress-level cash flow ($6.8B FCF, 22% margins) with operating leverage improving (18.4% operating margins vs 14.3% in 2022). However, growth decelerated dramatically (7% revenue growth vs 20%+ historically) due to Venmo monetization struggles, inflation headwinds, and e-commerce normalization post-COVID. Stock crashed 77% ($310 → $69) as market priced in “growth company losing growth.” At current valuation (P/E 13.8x, P/FCF 9.5x), PayPal is mispriced as mature stalwart rather than growth story—it’s a cash machine trading at value prices. ...