Not even gonna sugarcoat it: PYPL's been absolutely nuked. Look at that bloodbath from 76 last summer to low 40s just a couple months ago. Market hated everything about it for a while. But now it’s sitting at 51.46 and I’m calling for an aggressive bounce back to 61.75 in the next couple months. That’s about a 20 percent move. The capitulation got overdone, and the capitulation crowd is always late to close their shorts anyway.
Here’s what I see: management finally started making actual progress on costs instead of just talking a big game. The market’s been obsessed with their margin trajectory and it looks like some of the fixes are finally working through. Even that last earnings call hinted that the worst may have passed and I know more than a few funds are dying for any excuse to rotate back in. Plus, PYPL still has the user base and the brand. They're not some tiny fintech fighting for crumbs there's fat to trim and still tons of cash flowing in.
Obvious risk is that the competition isn’t sleeping. Apple Pay, Stripe, all those newer players are clawing away on the edges, and the second PYPL slips up on execution again, it’s back to the doghouse. But if you’re waiting for them to be perfect, you’ll never buy sentiment turned so fast that even a mediocre quarter could force a short squeeze or at least a rerate.
Earnings next quarter will be the catalyst. If there’s any kind of guide up, everyone’s going to pile in here. I’m not here for a multi year hold but I see a setup for a serious oversold rally. If they miss again sure, we’re probably seeing 40s again, but at these levels I'm betting on mean reversion and a management team desperate not to lose their jobs.