The Best Value Stock to Consider Right Now

This stock is trading near an all-time low valuation.

It’s a precarious time for investors as markets are overvalued, tech and AI stocks are volatile, and crypto investments have been trending lower. On top of that, some of the key economic indicators have been heading in the wrong direction, causing more uncertainty about where things are headed.

Given that backdrop, investors are becoming increasingly wary of overpriced stocks, particularly if there is some kind of economic downturn.

But there are still good stocks out there that are undervalued with strong growth potential. One of them is PayPal (NASDAQ:PYPL).

Here’s why PayPal stock is a good value and one to consider right now.

PayPal (NASDAQ:PYPL) at a Glance

Lowest P/E ratio ever for PayPal

PayPal’s price-to-earnings (P/E) ratio is currently at or around the lowest it has been since it went public in 2015, according to Macrotrends.

Its P/E ratio is currently sitting at around 13 times earnings and its forward P/E, based on expected earnings over the next 2 months, is even lower at around 11.

For a dominant market-leading company like PayPal, that is an extremely low valuation.

And its five-year P/E-to-growth (PEG) ratio is even more attractive. Currently, the PEG ratio is 0.66, also among the lowest ever for the stock. A PEG ratio below 1 means the stock is undervalued, and the further it is below 1, the more undervalued relative to its earnings expectations it is.

That low valuation comes from the company’s choppy performance in recent years, as investors have lost confidence in it. Shares are down 25% YTD, and it is a continuation of a bad five-year stretch for PayPal.

The stock has an average annualized return of -11% per year over the past three years and -19% over the past five years, even with huge pandemic era returns in 2020 and 2021.

Is PayPal ready for a turnaround?

PayPal underwent a leadership change a year ago and new CEO Alex Chriss has been refocusing the company on its core payment capabilities and streamlining operations. But the payoff has not really come yet for investors.

But there is reason for hope that things will begin moving back in the right direction. In the most recent earnings report, the company raised its guidance earnings guidance for the year, based on anticipated growth in user accounts and total payment volume.

It is also rolling out a new Agentic Commerce service, via partnerships with Perplexity and OpenAI, where AI chatbots are employed to facilitate PayPal transactions. The company expects this to drive more revenue.

PayPal stock recently got several price target upgrades from analysts following its most recent earnings release. It has a median price target of $80 per share, which would be 24% higher than the current price. It seems like a good opportunity to take a look at PayPal stock at this rock bottom valuation.