Joe, I just want to thank you for what you created here. Straight to the point, detailed analysis and not constantly trying to push or sell a product or service. You will be the top finance TH-camr soon!
He's the man. Qualtrim is a great app, and he's super chill. I'm so over youtubers that just pump up micro-caps and push their trade signals on you every week
Now when Joseph breaks down PayPal, I've no choice but to nibble some shares and options. This will not be a meta move but it will be a paypal move. New CEO, New stable coin, insane buybacks, I'm failing to be bearish here
I think most people are overlooking their Braintree business which is growing globally.... Revenue is traveling in the opposite direction as stock price, just getting silly valuation now which is excellent for stock buyback program.
Great breakdown on PayPal. There’s certainly inherent risks with it, but also some upside potential. I hold some shares of it but I’m not expecting anything over the moon in regards to expected returns. Hence why I will trade out of it as share price recovers. Good luck to anyone holding PayPal! 🙌🏻
I agree 💯 with your ultimate conclusion. I’ve been also looking at PayPal over the past few weeks and qualitatively I can’t see their competitive advantage that would set them up to return to previous highs. I see increased competition and PayPal becoming more and more irrelevant within the fintech space. Would love to see someone’s bull case on the company qualitatively. Great vid!
Awesome video great analyzes Joseph. I have seen a lot of comments and I see plenty of young investors who are not certain about their investments in PayPal etc. Let me give you a little advice. It is about the time in the market not about the timing especially for those who bought under $100 just hold your horses and you all will be fine.
Great analysis. Please make more of these for your usual investments like VICI, Chipotle, TXRH, Apple or Mastercard, it would absolutely rock (I mean in the same fashion, with the different scenario projections)
He has done this is some of his previous videos when talking about his investments. I know he's covered VICI and Mastercard. He's talked at length about Chipotle in one of his recent videos.
@@bishop4077i think he’s referring to making a 5-Year projected financial chart like the one here for each of his colonies which I don’t believe he has done yet
Mr. carlson... please explain one thing! How do you only have 287K subs? you're the most transparent invester on youtube + you explain everything wonderful. Thank you!
Paypal growth is linear in its absolute numbers, which explains the lesser percentages each year. I would not argue Paypal is slowing down, but just no longer in exponential growth... it is just growing linearly.
As a user of Paypal, I prefer not to use it as their fees are super high. I have found alternative cheaper solutions. I would assume that many other users will either migrate away from Paypal or Paypal will need to reduce their fees. None of these bode well for price appreciation. This means that the fundamental future is not so bright, offset slightly by a growing market.
I think the most important thing to analyze for PayPal now is its durability of moat. We need to qualitatively assess the level of moat in the industry. This is the determining fact for all other numbers. We need to know how much it will be interrupted by Apple Pay, Google Pay and Block etc. Of course, this qualitative analysis is very hard for most of us. For me, I can't gauge these thinkgs, and therefore it's outside of my circle of competence. For that reason, I am out.
yup they also own venmo and they are doing alot with crypto...these old timers when they see paypal they just think of ebay..Paypal is the number one processor in europe as well@@FlemetAeton
Just an FYI from a fellow Joe. In most of your videos you mention how a company is ran. The correct word usage is how a company is (or was) -run-. Those sentences use the passive voice in English.
I will be forever grateful to you, you changed my entire life and I will continue to preach on your behalf for the whole world to hear you saved me thank you Mr Joseph Carlson
I can’t get myself to pull the trigger at this price. I’m modeling PayPal’s margins getting absolutely nuked and it still says it’s cheap. However, what if this becomes like the next brokerage firm. Competition becomes so intense, and competition so fierce that the transactions become essentially free. It sounds ridiculous maybe, but it truly scares me. I think apple would be more than happy to undercut PayPals fees in order to suck people into the ecosystem. Scary stuff, but cheap if they can keep margins the same, or even increase them.
You forgot to account for FOMO. The market is fickle, there’s going to be a time where the stock goes bonkers for no other reason that it’s been ignored.
Thank you for your sensible look at the future of PayPal, and your ongoing commitment to finding and sharing top tier companies with us. The thing I love about Qualtrim are the bar charts. You know in a glance if things are going well for the company. I wonder if the same can be done withyour 5 year projection idea?
Thanks Joseph. Timely video. What about paypals moat or lack thereof? Growth catalysts? Mention of ebay, new ceo, venmo, competition like apple pay, qualitative aspects of the company etc. Thats the only thing missing from this video, but otherwise great video!
I placed PayPal as “medium” predictability. That factors into the valuation by the assumptions of FCF yield it will trade at in 5 years. The less predictable the company, the lower you should assume the valuation will be. A company that’s highly predictable? I consider that to be something like Costco or MasterCard. Company that has very low predictability? I would say that’s something like Paramount Global. I believe PayPal has medium predictability. So yes, moat is factored into the valuation process here, I just use predictability as a different way of factoring in risk of disruption or being defeated by competitors.
Situation is different META was spending like crazy and it stopped doing it a bit, fired thousands and reduced capex. Result? stock boomed PYPL cant do the same.
Graet video, what about Texas Road Hous? I bought today at $105.10. It's looking ugly closing bellow the 200 DMA. I think I'll go eat there this weekeng to boost their sales.
what is "wrong" with your valuation is your expected yield that has no logical basis. When the no risk treasury has 4% yield , giving a future yield of 2-4 % is very low, when the growth rate isnt in a high range. A company that doesnt grow and doesnt have excess returns ,cash yields should be at best 7%
I’m not incredibly inspired to buy PayPal. 9% growth in a bullish scenario, what business and qualitative aspects of the business justify this? This video mostly went over some of the numbers here, which are meant to be a reflection of reality, but what is the reality here with the business?
“If they are smart they use every penny to buy back their shares” I disagree, yes it would heb considered smart for from an investor POV But they need most of their pennies to fund their operations to stay competitive! That’s the whole reason for the slump in price in the first place, they are fighting to grow
Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly.
Investors should exercise caution with their exposure and exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or trusted advisor in order to navigate this recession and achieve potential high yields.
This is superb! Information, as a noob it gets quite difficult to handle all of this and staying informed is a major cause, how do you go about this are you a pro investor?
Through closely monitoring the performance of my portfolio, I have witnessed a remarkable growth of $483k in just the past two quarters. This experience has shed light on why experienced traders are able to generate substantial returns even in lesser-known markets. It is safe to say that this bold decision has been one of the most impactful choices I have made recently.
I don't really understand how Paypal will be a profitable company going forward. When it was tied to Ebay everybody used it all of the time however Ebay is trying to break away from Paypal and if it succeeds where would Paypal make money?
You can't really understand what's going on especially in the last five years unless you're looking at competitor Stripe at the same time and the impact it's had and a market share it's taken
My base case for PYPL is in 5 years the Barbie movie part 2 will be released and we'll all be living underground from climate change and eating bugs for nourishment. And we'll all be speaking Mandarin.
Great video as always Joseph… but question (maybe I am missing something)… but why would the percentage of increase go up if the cash flow yield goes down in the return distribution?
Joe, I am confused as to why you claim that Paypal should spend every penny they have on stock buybacks. It doesn't seem like their Earnings Per Share metric is more important than the business itself - shouldn't they be investing it into their operations, so they can increase their revenues and margins etc.?
Im holding at 82$ average. Hope stock price recovers. Still believe in its future ‘cos it is not as good as peak price was and not as bad as actual price reflects
Paypal is going to trim the fat in 2024 and 2025 while doing share buybacks using FCF in 2023 and beyond my guess is its going to be a long gruesome turnaround but its going to be a good 5 years or more before we see 250$ a share . I think Paypal is going to be here a long time .
I see them starting buybacks and being kinda in the middle with returns around 12-14% per year. My average buy in is $68, I'm happy, I may average down a little, but I'm pretty happy with my current position.
Great video loved the return distribution addition to the analysis, very interesting. Can you shed some light on how that is determined? I noticed the blue highlight shades 5 cells of the distribution range. Is this automatically done based on a valuation type/assumption built into the spreadsheet for every case? Or is it something more manual like a personal estimation?
I came up with an algorithm thats combining growth rate with predictability. I placed PayPal with medium predictability. High growth rate high predictability means high valuation or low FCF yield. Slow growth and low prediction would mean a very high FCF yield or low valuation. If you have something like a high growth rate but a very unpredictable company you have a medium FCF yield. That’s the basic premise of the ranking there. The purpose is to help gauge expectations on how the company will likely trade.
Hey! Are you planning on incorporating more features in the Qualtrim website? While i think the website is great, I believe that its missing a hint of something - maybe including direct financial statements from the company, other indicators, comparisons with other competitors, and more. Keep up the great videos! :)
I am holding 3000 shares at 64.18 dollars. My expectation was that it would bounce from the 59 area, but it didn't, is it headed towards the low 50s now?
The entire market is going down. I have a huge holding in msft and a little bit in paypal about 400 shares. Relax this is just a correction it takes a while if you can't handle the drop give yourself a brake do not log into your brokerage account for few weeks or months you will be good.
Joe, I just want to thank you for what you created here. Straight to the point, detailed analysis and not constantly trying to push or sell a product or service. You will be the top finance TH-camr soon!
He's the man. Qualtrim is a great app, and he's super chill. I'm so over youtubers that just pump up micro-caps and push their trade signals on you every week
Now when Joseph breaks down PayPal, I've no choice but to nibble some shares and options. This will not be a meta move but it will be a paypal move. New CEO, New stable coin, insane buybacks, I'm failing to be bearish here
I think most people are overlooking their Braintree business which is growing globally.... Revenue is traveling in the opposite direction as stock price, just getting silly valuation now which is excellent for stock buyback program.
Joseph you are a very talented individual. youtube finance does not often get this good.
Awesome video Joseph. Great work with looking at the different scenarios and the bad and the good. Enjoyed it!
Sup Jeremy! 👋
@@GarciaCapital small world 😎
I watch countless of "stock market youtubers" but you're the most professional by far. Great video!
Great breakdown on PayPal. There’s certainly inherent risks with it, but also some upside potential. I hold some shares of it but I’m not expecting anything over the moon in regards to expected returns. Hence why I will trade out of it as share price recovers. Good luck to anyone holding PayPal! 🙌🏻
I agree 💯 with your ultimate conclusion. I’ve been also looking at PayPal over the past few weeks and qualitatively I can’t see their competitive advantage that would set them up to return to previous highs. I see increased competition and PayPal becoming more and more irrelevant within the fintech space.
Would love to see someone’s bull case on the company qualitatively.
Great vid!
Companies revenue is currently traveling in the opposite direction as stock price...
Just opened up a position a few days ago at $60 average cost. Fundamentally a better company than 5 years ago at a much better price.
It's in a downtrernd my guy. Why would you try to catch a falling knife? If you really belive hold. But i wouldnt get my hopes too high.
The best video analyzing Paypal on the internet. And love you sticking to your investment plan. A rational investor.
Awesome video great analyzes Joseph. I have seen a lot of comments and I see plenty of young investors who are not certain about their investments in PayPal etc. Let me give you a little advice. It is about the time in the market not about the timing especially for those who bought under $100 just hold your horses and you all will be fine.
Keep up the great content! Love the channel
bro didnt even watch the video
@@alphascrazydon't have to, his podcast is always great content. Haven't listened to an episode I didn't enjoy
@@alphascrazy😂😂
Great analysis. Please make more of these for your usual investments like VICI, Chipotle, TXRH, Apple or Mastercard, it would absolutely rock (I mean in the same fashion, with the different scenario projections)
He has done this is some of his previous videos when talking about his investments. I know he's covered VICI and Mastercard. He's talked at length about Chipotle in one of his recent videos.
@@bishop4077i think he’s referring to making a 5-Year projected financial chart like the one here for each of his colonies which I don’t believe he has done yet
Gross margins went from 64% in 2015 to 53% in 2020 and are in 48% now . That shows a company that loses it pricing power.
Never catch a falling knife!
Mr. carlson... please explain one thing!
How do you only have 287K subs? you're the most transparent invester on youtube + you explain everything wonderful. Thank you!
Great video Joseph. thanks ! I believe in PYPL to rebound significantly
Paypal growth is linear in its absolute numbers, which explains the lesser percentages each year. I would not argue Paypal is slowing down, but just no longer in exponential growth... it is just growing linearly.
Qualtrim note. Have you considered including a formula so users can understand how various cash flow figures are calculated? 6:02
Day 237 of asking Joseph to call his stocks Double Compounders with Cheese 🍔
Is the day number compounding? 😂
🍔🍔🍔
Come on, Joey Joe Joe!
Love seeing this comment every time lol
At this point the audience is demanding it. It would be wise of Joe to do it.
How to calculate a return distribution
As a user of Paypal, I prefer not to use it as their fees are super high. I have found alternative cheaper solutions. I would assume that many other users will either migrate away from Paypal or Paypal will need to reduce their fees. None of these bode well for price appreciation. This means that the fundamental future is not so bright, offset slightly by a growing market.
You do realize they have braintree as well, if you use Uber or Airbnb you are indirectly using a Paypal service...
what are you using?
I think the most important thing to analyze for PayPal now is its durability of moat. We need to qualitatively assess the level of moat in the industry. This is the determining fact for all other numbers. We need to know how much it will be interrupted by Apple Pay, Google Pay and Block etc. Of course, this qualitative analysis is very hard for most of us. For me, I can't gauge these thinkgs, and therefore it's outside of my circle of competence. For that reason, I am out.
Braintree processes those payments. PayPal is turning into a different kind of business it seems.
yup they also own venmo and they are doing alot with crypto...these old timers when they see paypal they just think of ebay..Paypal is the number one processor in europe as well@@FlemetAeton
Just an FYI from a fellow Joe. In most of your videos you mention how a company is ran. The correct word usage is how a company is (or was) -run-. Those sentences use the passive voice in English.
I love PayPal at these prices.
Can you do a video about Etsy in the future?
Thank you Joseph!
easily your best video. great deep dive.
I will be forever grateful to you, you changed my entire life and I will continue to preach on your behalf for the whole world to hear you saved me thank you Mr Joseph Carlson
I can’t get myself to pull the trigger at this price. I’m modeling PayPal’s margins getting absolutely nuked and it still says it’s cheap. However, what if this becomes like the next brokerage firm. Competition becomes so intense, and competition so fierce that the transactions become essentially free. It sounds ridiculous maybe, but it truly scares me. I think apple would be more than happy to undercut PayPals fees in order to suck people into the ecosystem. Scary stuff, but cheap if they can keep margins the same, or even increase them.
Yeah stay away from the shares right now. It's also in a downtrend looking at 100-200-TEMA. Theres many better options in the market right now.
You forgot to account for FOMO. The market is fickle, there’s going to be a time where the stock goes bonkers for no other reason that it’s been ignored.
PYPL is done. Apple Pay and Google Pay are taking nearly all of its market.
Thank you for your sensible look at the future of PayPal, and your ongoing commitment to finding and sharing top tier companies with us. The thing I love about Qualtrim are the bar charts. You know in a glance if things are going well for the company. I wonder if the same can be done withyour 5 year projection idea?
How do I log into your program?
Joseph, as always, great analysis.
I like deep dives into individuals companies a lot. Good format
Good episode. Thanks, 😊
I own PayPal thank you for this great information!
Mastercard and Visa will be shrinking! They simply won’t be allowed to keep those margins! Mark my words!
There was a good reason Paypal went to. $300, people being stuck in their homes and buying everything online
Did a massive mistake with them. I'm down 60%...
Thanks Joseph. Timely video. What about paypals moat or lack thereof? Growth catalysts? Mention of ebay, new ceo, venmo, competition like apple pay, qualitative aspects of the company etc. Thats the only thing missing from this video, but otherwise great video!
I placed PayPal as “medium” predictability. That factors into the valuation by the assumptions of FCF yield it will trade at in 5 years. The less predictable the company, the lower you should assume the valuation will be.
A company that’s highly predictable? I consider that to be something like Costco or MasterCard. Company that has very low predictability? I would say that’s something like Paramount Global. I believe PayPal has medium predictability.
So yes, moat is factored into the valuation process here, I just use predictability as a different way of factoring in risk of disruption or being defeated by competitors.
Excel analisys !! thanks for sharing !!
Quick question; could you please share your updated perspective on Disney ?? Big thanks
Situation is different META was spending like crazy and it stopped doing it a bit, fired thousands and reduced capex. Result? stock boomed
PYPL cant do the same.
You think they can't improve their margins? Almost every company in the sector has 40% margins. Check visa and MA. Paypal can improve their margins.
they compare apples to oragnes.
Great video thanks brother
They won’t even allow me to close my account. Terrible company.
Great vid 👍
Graet video, what about Texas Road Hous? I bought today at $105.10. It's looking ugly closing bellow the 200 DMA. I think I'll go eat there this weekeng to boost their sales.
what is "wrong" with your valuation is your expected yield that has no logical basis. When the no risk treasury has 4% yield , giving a future yield of 2-4 % is very low, when the growth rate isnt in a high range. A company that doesnt grow and doesnt have excess returns ,cash yields should be at best 7%
did not understand how you check return distribution for the growth estimates.
One question, how do share buybacks factor into the stock price in this spreadsheet valuation? Or does it not affect it at all?
Can you do a video on enviva pellets.
Thank you
I’m not incredibly inspired to buy PayPal. 9% growth in a bullish scenario, what business and qualitative aspects of the business justify this? This video mostly went over some of the numbers here, which are meant to be a reflection of reality, but what is the reality here with the business?
Hmmm, great buy? could double ? and yet you won’t put your $ in-
Your thought about Adyen as it got decimated?
Fantastic analysis thank you 😊
“If they are smart they use every penny to buy back their shares”
I disagree, yes it would heb considered smart for from an investor POV
But they need most of their pennies to fund their operations to stay competitive! That’s the whole reason for the slump in price in the first place, they are fighting to grow
Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly.
Investors should exercise caution with their exposure and exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or trusted advisor in order to navigate this recession and achieve potential high yields.
This is superb! Information, as a noob it gets quite difficult to handle all of this and staying informed is a major cause, how do you go about this are you a pro investor?
Through closely monitoring the performance of my portfolio, I have witnessed a remarkable growth of $483k in just the past two quarters. This experience has shed light on why experienced traders are able to generate substantial returns even in lesser-known markets. It is safe to say that this bold decision has been one of the most impactful choices I have made recently.
Wow, that’s stirring! Do you mind connecting me to your advisor please. I desperately need one to diversified my portfolio.
I’ve actually been looking into advisors lately, the news I’ve been seeing in the market hasn’t been so encouraging. who’s the person guiding you?
You inspired me to create my channel. I love your content
only a double up in 5 years would be a failure to me.
I don't really understand how Paypal will be a profitable company going forward. When it was tied to Ebay everybody used it all of the time however Ebay is trying to break away from Paypal and if it succeeds where would Paypal make money?
You can't really understand what's going on especially in the last five years unless you're looking at competitor Stripe at the same time and the impact it's had and a market share it's taken
Really nice intro!
My base case for PYPL is in 5 years the Barbie movie part 2 will be released and we'll all be living underground from climate change and eating bugs for nourishment. And we'll all be speaking Mandarin.
lolllllllllllllllllll
I am man from Poland. I use paypals
Great video as always Joseph… but question (maybe I am missing something)… but why would the percentage of increase go up if the cash flow yield goes down in the return distribution?
Growth would likely require more investment
@Joseph can you please explain how exactly do you calculate Return Distribution? Again great video!
Good stuff Joseph
Joe, I am confused as to why you claim that Paypal should spend every penny they have on stock buybacks. It doesn't seem like their Earnings Per Share metric is more important than the business itself - shouldn't they be investing it into their operations, so they can increase their revenues and margins etc.?
its a value trap
Many TH-camrs are pushing Palantir too
Look into $AAP as well
Cash flow figures are not correct. Have to include changes in working capital.
When everyone is talking about it you might want to keep looking for something people aren’t so excited about.
Bagholding the position. Not adding but not selling just going to hold for a couple years and see what the stock does.
Im holding at 82$ average. Hope stock price recovers. Still believe in its future ‘cos it is not as good as peak price was and not as bad as actual price reflects
how many shares?
@@rochester3 lets say more than 50
@@backupraceres i got 700 at 70
best time to average down@@backupraceres
It’ll eventually get back over 100 but maybe a 2 year wait
This is an easy multi bagger as this point.
Finance TH-camrs mostly always suck. You are one of the good ones.
PYPLs worst nightmare : apple pay
Any ETA on the valuation spreadsheet tool Joseph?
Does qual trim have the metric Return on invested capital ? Joel Greenblat uses it often.
Paypal is going to trim the fat in 2024 and 2025 while doing share buybacks using FCF in 2023 and beyond my guess is its going to be a long gruesome turnaround but its going to be a good 5 years or more before we see 250$ a share . I think Paypal is going to be here a long time .
Agree but shares can still fall what, 20-50%. PayPal is in a downtrend, and as long as the fundamental- AND technical analysis says so is a no.
@@chrisja1998 keep waiting
It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.'
Another Fintech firm with no moat. Glad that I sold it at the top of the bubble 😅
the moat is shrinking
I am disappointed l was not in the intro as oke of the people who made a video about paypal. 😢😢
Yay! New Video！First!
It's going to 1k a share in the next week
so many youtubers pumping this stock it might actually double if only for a short while 😂
And palintard
🚀 pypl🌙
To big of a market cap. This isn’t game stop.
Bought PayPal as my first holding in 2016. Watched it go all the way up and all the way down. Gave up on them
What are some of the other predictable stocks like Mastercard?
80 percent down not 70☺️🤝
Even Joseph talking about PayPal??!!? Awww shit I may have to buy
Only concern is large debt on balance sheet
They have a very comfortable amount of debt actually…?
I see them starting buybacks and being kinda in the middle with returns around 12-14% per year. My average buy in is $68, I'm happy, I may average down a little, but I'm pretty happy with my current position.
lol
@@crohmer 😂
You have a very good holding 68 is a great average.
@@trance1986 hoping it pays off in the long term!
Great video loved the return distribution addition to the analysis, very interesting. Can you shed some light on how that is determined? I noticed the blue highlight shades 5 cells of the distribution range. Is this automatically done based on a valuation type/assumption built into the spreadsheet for every case? Or is it something more manual like a personal estimation?
I came up with an algorithm thats combining growth rate with predictability. I placed PayPal with medium predictability. High growth rate high predictability means high valuation or low FCF yield. Slow growth and low prediction would mean a very high FCF yield or low valuation. If you have something like a high growth rate but a very unpredictable company you have a medium FCF yield.
That’s the basic premise of the ranking there. The purpose is to help gauge expectations on how the company will likely trade.
For me, growth with 9% is a bear case scenario.
based on what metrics?@@VaskoBog
@@JosephCarlsonShow Thanks that makes sense. I'll be looking forward to see it in qualtrimm ;)
@@JosephCarlsonShowMunger said to ignore people who talk about ebitda
Hey! Are you planning on incorporating more features in the Qualtrim website? While i think the website is great, I believe that its missing a hint of something - maybe including direct financial statements from the company, other indicators, comparisons with other competitors, and more. Keep up the great videos! :)
If cbdcs go live wouldnt that mean an instant kill on paypal, skrill, monegray, western union etc?
What do you think about writing a book ?
Not interested in pay pal
Next!
I am holding 3000 shares at 64.18 dollars. My expectation was that it would bounce from the 59 area, but it didn't, is it headed towards the low 50s now?
I hope so!! Sentiment looks bearish still, IMO.
The entire market is going down. I have a huge holding in msft and a little bit in paypal about 400 shares. Relax this is just a correction it takes a while if you can't handle the drop give yourself a brake do not log into your brokerage account for few weeks or months you will be good.
It won't
yup and that’s because apple pay exists