bizoo_n Investment thesis Financial Institution inefficiency, digitalization, and regulation, such as PSD2 , led to the explosive growth of fintech, which proliferated into payments, insurance, asset and wealth management, and real estate. PayPal Holdings Inc. ( NASDAQ: PYPL ), the leading US fintech payment company, benefitted from this industry development by providing a secure and frictionless payment experience.
With competitors such as banks, big tech, and other fintech companies eager to grab a slice of this fintech segment, PayPal is at a crucial inflection point. It needs to respond or risk losing market share to its competitors. The new management and its strategy to refocus PayPal on its core competence, emphasizing profitable growth, and PayPal's stock selling at a 25% discount convinced me that PayPal is an excellent profitable growth stock you can buy right now.
New Management, Refocusing PayPal PayPal has gone on an acquisition spree to improve its payment service, from Coupon to Logistics. However, these acquisitions have contributed little to what customers want from PayPal: secure and frictionless transactions between merchants and consumers. After its acquisition spree, the company did too many things at a time instead of focusing on sustaining innovation, such as improving its branded checkout experience by making it more seamless or frictionless.
PayPal's New CEO, Alex Chriss, acknowledged this in his interview at the Morgan Stanley Technology, Media & Tel.