PayPal Holdings, Inc.
Thesis
PayPal is positioned for growth due to its scalable business model and recent management changes that support valuation. The new CEO, Alex Chriss, aims to make PayPal leaner and more cost-efficient, with significant share buybacks planned. The company is expected to achieve a modest revenue CAGR of 8% and an adjusted EPS CAGR of 13% through 2028, with an IRR of 15%.
Did it work?
The pitch was long PayPal with an expected 15% IRR driven by cost discipline, buybacks, and 8% revenue/13% EPS growth through 2028, but the stock is down 16.4% after 35 months — roughly a 30+ percentage point shortfall versus even the thesis's own compounding path. While some operational elements (management change, cost cuts, buybacks) may have partially materialized, the market has decisively not validated the growth-and-valuation thesis, with the majority of the stated horizon now elapsed. The remaining runway to 2028 is too short to plausibly close a gap of this size at the projected IRR.