Hey this is tom, and you know 30 years ago paying for things online had the massive fear factor attached to it. It was like going through a gauntlet. Would you ever get the item? How bad the quality would be? Would you ever get a refund? If you are unsatisfied, basically everything that's wish today, i'm just kidding i like wish now. Essentially this was a massive fear factor that came with buying things online and things that seemed trivial today were a major concern in the 90s now 30 years later.

The world obviously has changed a lot and we have to talk about people within this new ecosystem, but before we talk about paypal, which was one of the first companies to try and rationalize and kind of make it mainstream to buy things online. Before we talk about the 2021 version of paypal, let's go back to the origin story, because it is nothing short of phenomenal elon's company merged with another company. It became paypal, he was running the company uh, he went on an investment raising trip and when he got back what happened well, yeah so now the way people came to life is nothing short of phenomenal. Now it came out of a merger between two companies confinity and x.com.

The founder and ceo of x.com was none other than elon musk. Yes, the guy. We all talk about these days was the founder and ceo of x.com, which absorbed confinity. Now the first thing that elon musk did in his new role as the ceo of this new company, was to get rid of everything else.

Besides electronic payments, the man was a visionary, but that vision didn't go down too well with the existing board members, which literally kicked him out a year later in 2000. He was out now taylon's credit. He never made that mistake again and from there on, he always maintained control in every major investment. He did, including tesla, which actually proved itself, because when that board rebelled against him, he was the one to kick them out.

Elon musk is the most famous tesla ceo. Everyone, but martin eberhard and mark tarpening, were the original founding executives. Cnbc sat down with them to talk about the earliest days at tesla. There are a lot of people who don't realize you two started the company.

How do you respond to people who think that elon is the creator of stuff and after elon was departed, involuntarily and other another high-profile future high profile ceo took over? Of course, he was not known back then, a guy by the name of peter thiel. Now peter thiel is obviously the founder of palantir. Now a household name. Wasn't that known back then, and he actually took with the company public in 2002 and surprisingly, just a few months after paypal went public ebay, decided to purchase it and bury it in its convoluted structural portfolios, essentially denying it for years for massive opportunities, such as amazon, Alibaba even walmart thinks that people could have been dominating today, but didn't because it was part of that ebay ecosystem.

Eventually, in 2015, the company was finally then got spun off out of ebay and into the free world. Essentially, this new paypal was founded in 2015.. The old people is much like you know the old greece, it's not really relevant for the greece. You know today, it's completely two different companies.

Now this company hired a new ceo guy by the name of dan schulman, who was the president of amex. He came on. He took over as ceo and he's been ever since the ceo of the company doing a phenomenal job now then doubled the revenue in his five years from all the way, 9 billion to 22 billion in the last 12 months, double the amount of active users, 277 Billion in total payments, 36 increase 16 million net new active accounts, 72 increase 6.12 billion dollars in revenue, 23 increase 1.51 billion non-gaap operating income 29 increase. Look at this year.

They just had 936 billion total payment volume, 31 increase 73 net. New active accounts, 95 increase 15.4 billion payment transactions, 25 increase 21.5 billion in revenue, a 22 increase look at these numbers and since paypal has been pretty much running like crazy in the past few months, i think it's time for us to evaluate the company, see whether It's actually reasonable to invest in this price because it had a very nice run up now, we're going to go through a dcf, a t, pranks review of other analysts and also my own personal management review. Talking about how good dan schlumen is, is the ceo and, of course, the actual business model, the total addressable market, and how i see this business developing buckle up. This is about to get bumpy and, as always before, we get started.

I only ask of one thing: don't click, nothing, don't smash, nothing don't buy nothing. This is just my opinion, which might be inaccurate might be wrong, might be the ramblings of amendment. You have to do the research for yourself find out for yourself whether this is a good investment for you or not. I'm just sharing my opinion and let's get started.

289.6 is the share price 340 billion market cap 1.22 short interest, which means nobody's shorting this company and let's get to it now. If we take a look at the momentum here, the company did gain 67 in the past year 23, just in the past three months alone. So is it expensive? Let me show you why i think it's not right here is our dcf for paypal and, as you can see right here, we have the ebitda for the next five years and it's based on the presumption that the company will double its revenues over the course of The next five years that's been presented in their investment plan and their guidance that they expect to double what they do in 2021 in 2026. That's nothing out of the ordinary if you look at the numbers before for the past five years, so if they actually make this goal, this is what it's going to look like.

Now i've used the 21 tax rate and even if the tax rate does go up, i know. However, you have to understand that the effective tax rate for paypal for the past five years with the nominal rate was 21 was only 16. It's always paying less than the nominal rate, so even if the rate goes up to 28, we're still within the margin of error, we're actually still very conservative, even with the 21 nominal. Now we have our cap expenditure of 5.7 billion over the next five years, and the free cash flow we're discounting at 10.

Now what we have here is also four percent long term growth and a 25 x multiplier right. Here we have the debt and the cash. The negative 3.3 net debt, which means that they have a valuation of 331 dollars per share, meaning a 14.4 upside. According to my dcf and now, let's look at what other analysts on wall street are saying about paypal and as always for that we're going to use the pranks.

Now you know i've been using the pranks for a whole year without even having an affiliate link. These guys reached out to me and said: hey, here's an affiliate link. So now i'm using an affiliate link and you get to get a 10 discount if you actually sign up using my link. So why not it's a win-win, and if you sign up within the next four days, the discount goes up to 20, because tip pranks is having its birthday sale.

So here you go so according to tip ranks the consensus is 315. However, let me highlight an analyst which i think is at the top of the list here, which is james from morgan stanley he's ranked 177 out of seven and a half thousand means he's in the top two percent. He has 83 success rate 19.2 average return and he gave actual 23 ratings on paypal over the course of the past two years, with the 21 out of 33 ratings being correct and a 45 average profit on the stock and his stagger price is 337 even higher Than mine 16.37, as you can see, he knows this ever since 19, all the way to today he was always right about this company, so he has a higher target price than mine, but i think we're in general, in agreement here check out his profile check out The pranks the links to sign up is below. Let's move on 9.2 billion right now, we're 22.8 almost 23 billion in his tenure.

Look at the balance sheet. They have 13 billion in cash now this is 5.7 in actual cash and 7.3 in short-term investments. Essentially, this is cash 72.5 billion in assets. If you exclude the goodwill here for the purchases, they did it's actually 63, so we have 53 billion over 63 billion, which means they're net positive on assets versus liabilities.

Even if we look at this nine billion dollar debt, it's still net positive. They have more cash and short-term investments to cover that debt, not an issue at all. And if we look at the profitability here, it's just mind-blowing how good they are 22.8 net income margin and look at the growth here. They grew.

25.2 revenue last year expect to grow another 21. This year, 50.5 ebitda growth expected to grow 25. So there's a lot of growth coming for this company, don't discount it! So here you go! Ladies and gentlemen. People i think, is definitely prime for success.

It's not cheap, but it's still reasonably priced based on some reasonable assumptions. But again the choice is yours. You have to do the decision for yourself now that was my two cents about paypal. I hope you enjoyed this video if you think it's valuable share it with friends who, you think will enjoy this video as always a huge thanks to the channel members and the patrons for making this possible.

You guys are amazing. Thank you. So much from the bottom of my heart, we'll see you guys in the next video.