PayPal

Methodology

PayPal's digital payments platform generates relatively predictable transaction revenue, though growth deceleration from pandemic normalization and competition creates uncertainty. Branded checkout and Venmo provide visibility but face intensifying competition. The calculation works when normalizing for pandemic pulls and focusing on sustainable take rates and engagement trends.

Methodology

PayPal's PEG ratio has compressed as growth decelerated from pandemic highs and competitive pressures intensified from Apple Pay, Block, and others. The metric should account for normalized transaction growth and margin trajectory. Compare to historical ranges and evaluate execution on profitability initiatives rather than just top-line expansion.

Methodology

PayPal pays no dividend, making PEGY equal to PEG as management prioritizes product development and strategic initiatives to reignite growth. Capital allocation includes opportunistic buybacks. For PayPal, transaction margin improvement and user engagement trends matter more than current income in assessing turnaround potential.