- PayPal
PayPal is an absolute cash machine that has been beaten down by about 75% from its highs.
The main reason for its decline is that investors were disappointed when PayPal's growth abruptly slowed down in 2022, and management conceded that its previous user growth targets were unrealistic. Growth remained slow in 2023, and the company's future path to growth isn't crystal clear.
However, it's important for investors to realize that this is still a strong and highly profitable business. Plus, PayPal has completely overhauled its management team. Every member of its C-suite is new to the business, and it is an impressive group.
The company has 429 million active users between PayPal and Venmo and processes more than $1.6 trillion in annualized payment volume. The company produces about $5 billion in free cash flow annually and has been aggressively buying back its own stock with it, a sign management thinks it's cheap.
It's not hard to see why PayPal's management is choosing to use its capital this way. As of June 2024, the stock traded at a historically low price-to-sales ratio and for just 14 times forward earnings.
https://www.fool.com/investing/top-stocks-to-buy-and-hold/