Let’s not sugarcoat it: The 4Q25 earnings were a "Kitchen Sink" quarter. Management withdrew guidance and signalled that 2026 will be a year of reinvestment, not margin expansion.
The growth investors fled. This is why we (the value investors) are stepping in.
The New Reality:
We have downgraded our Price Target from $100 to $65. However, with the stock at $41.70, the risk/reward is more attractive than ever. You are buying a cash-flow machine at a historical low valuation (8x P/E).
We are no longer playing for "Growth". We are playing for "Mean Reversion".
INSIDE THE "HARD RESET" NOTE:
▸The Valuation Floor: Why 8x P/E is the absolute bottom for a company generating this much Free Cash Flow.
▸The "Hidden Asset": The $6 Billion Buyback program. At these prices, PayPal is cannibalizing its own float faster than ever.
▸Scenario Analysis: Bear Case ($35) vs. Base Case ($65). The asymmetry is now heavily skewed to the upside.
