The Intrinsic Value Podcast - The Investor’s Podcast Network · The Investor's Podcast Network

TIVP030: PayPal (PYPL): Value Trap or Multibagger? w/ Daniel Mahncke & Shawn O’Malley

·1 hr 26 min·5 clips

PayPal knows your pant size and favorite colors, sitting on a gold mine of data that could fuel a massive ads business.

PayPal is framed as a puzzle. The company still moves enormous payment volume and has hundreds of millions of active accounts, but the stock is down more than 75 percent from its peak. That mismatch sets up the episode. Are investors still punishing old growth problems while the business underneath is starting to change? Alex Chris is the pivot point. His plan gets described as a move away from empty-calorie growth, especially low-margin B2B volume that made revenue look better than profits. The episode does not toss B2B aside. It processed roughly 575 billion dollars in 2024, about a third of total volume, but a fee rate around 25 basis points made it a thin contributor. That creates the uncomfortable part of the story. Dropping unprofitable customers hurts transaction revenue now, while better transaction margins may matter more later. Branded checkout is the cleaner part of the pitch. That higher-margin business grew six percent, peer-to-peer grew eight percent, and Venmo grew ten percent, so the hosts see more health in the franchise than the headline slowdown suggests. Fastlane gets time because it could make guest checkout easier and lift conversion where PayPal earns better margins. Braintree gets a tougher read. Management is moving it from volume at almost any price to profitable volume, even if low-margin enterprise deals roll off and growth looks softer for a while. Buybacks are part of the math too. PayPal is repurchasing shares at its fastest rate ever, which gives patient holders more of the business while the market still hates the name. The bull case is not automatic. Ads, agentic commerce, margin repair, and the B2B cleanup all have to show up. The tone leans bullish, with execution risk still on the table. The closing brings PayPal back to its first big dream: it did not create a new currency, but it did build the largest e-commerce payment system.

As heard by us

A measured case that PayPal may be turning a corner.

The episode treats PayPal as a valuation problem: a stock down more than 75% from its peak, but still a cash machine inside a fast-growing oligopoly.

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Why you'd press play

You want a fresh read on whether PayPal's slump is a trap or a setup.

Read the full recommendation in PlayNext →

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