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I can’t think of a more hated large cap stock than PayPal (PYPL) – which reports 1Q23 earnings after the close Monday. While PYPL was extremely overvalued in 2021, I believe it is extremely undervalued today.

In its 4Q22 earnings report, PYPL guided 2023 EPS to $4.87 and said it would use ~75% of Free Cash Flow to buy back stock. At its current price of $76 – therefore – PYPL is trading for less than 16x current year EPS guidance. That’s too cheap for the leading player in electronic payments. And so I like that PYPL is going to use so much money – probably somewhere in the neighborhood of $4.5 billion – to buy back stock at what I believe are undervalued prices.

PYPL has been dead money for about a year now but I think the time is right for the stock to get going.

#earnings for the week https://t.co/lObOE0dgsr $PYPL $PLTR $ABNB $DIS $DVN $TSN $BNTX $RBLX $RIVN $OXY $LCID $FSR $TWLO $JD $AFRM $NKLA $IEP $UPST $TTD $VTRS $SIX $WYNN $DISH $NVAX $SWKS $DOCN $FRPT $ENR $AXSM $MCK $U $SU $KKR $WDC $HIMS $LI $AMR $ANIP $BROS $WEN $THS $COTY… pic.twitter.com/wuQ08MfzlG

— Earnings Whispers (@eWhispers) May 5, 2023

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