PYPL – Market expectations are for Uniform ROA to expand, but management may have concerns about their wallet functionality, revenue growth, and travel and event spending

• PayPal Holdings, Inc. (PYPL:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 73.9x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about the PayPal and Venmo wallets, domestic revenue growth, and weakness in the travel and event verticals
• Specifically, management may be overstating the functionality of their PayPal and Venmo wallets, their focus on capital allocation discipline, and the diversification of their product portfolio. In addition, they may lack confidence in their ability to reimagine the next generation of the financial system, build on strong business momentum, and improve value-added service revenue. Furthermore, they may be concerned about declines in travel and events verticals and their impact on U.S. revenue growth and Braintree. Management may also lack confidence in their ability to continue to deliver operating efficiencies, maintain record earnings and free cash flow, and mitigate revenue growth headwinds from eBay’s managed payments transition