PayPal (PYPL) is a well-known name when it comes to peer-to-peer and alternative payment methods. If you had bought the stock in July 2015, when it first traded independently as PYPL, you would have thought you would have made a small fortune today, according to PYMNTS. But believe it or not, if the stock’s closing price on May 2 was $66.98, he wouldn’t have even doubled his money.
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That’s not to say that if you had jumped at the right time, you wouldn’t have had ample opportunity to make impressive profits along the way. In fact, PayPal has been on a roller coaster ride on the Nasdaq market over the past decade.
For example, PayPal’s highest stock price was 308.53 in July 2021, as detailed in Macro Trends. The initial closing price was about $40, so if you had timed everything perfectly and cashed out at a high price, your investment would have grown to $7,713, giving you a profit of $6,713. not bad. However, if he had held on to the stock until today, his investment would have been reduced to $1,702.16, and his return would have been a much less attractive $702.
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Why has PayPal’s value fallen in recent years?
There are several reasons for PayPal’s recent stock decline. First, PayPal is actually losing users. According to The Motley Fool (via Nasdaq), since 2022, its user base has declined by 10 million people. The current number of active users is 425 million, so it’s not that many, but it’s not the direction investors want. This decline can be attributed, at least in part, to increased competition in the payment app space.
Another potential reason for the stock price decline is slowing sales growth, which has hovered between 5% and 10% for the past few years. That’s well below the revenue growth rate that The Motley Fool outlined, which could exceed 20% in 2021. Another trend is one that doesn’t captivate investors at all.
Should I buy PayPal now?
This is a difficult decision. With a market cap of nearly $70 billion, higher than many of its competitors, and a P/E ratio of 16.85x (as of May 3), lower than many of its competitors, no one would blame you for betting on PayPal’s turnaround. you can’t. But today’s world is a far cry from PayPal’s heyday, and it’s more competitive than ever. Therefore, buying PayPal stock should be considered a relatively solid investment in value stocks, but not a way to crush the market.
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This article originally appeared on GOBankingRates.com: Here’s How much a $1,000 in PayPal share in 9 years ago would be value to Today
