Charts reiterating the same points [here](https://open.substack.com/pub/companycharts/p/get-in-were-doing-pypl?utm_campaign=post-expanded-share&utm_medium=web)
**The multiples**
Here's what everyone looks at first:
* P/E: 11.19
* P/S: 1.67
* P/FCF: 9.88
* P/GP: 4.03
* P/CFO: 8.56
* P/Equity: 2.71
low multiples don't mean anything in isolation. The question is: do the multiples match the growth rate?
For FCF, I'm using an 11% long-term growth estimate. Looking at their CAGR history:
* 1-year: -15.69% (ouch, but this is the post-COVID hangover)
* 5-year: 8.52%
* 6-year: 10.95%
* 7-year: 10.66%
* 10-year: 14.78%
Once you get past the noise, the 5-10 year range settles into that 10-11% corridor. So, 11% isn't pulled from thin air.
Now, applying the Peter Lynch PEG framework to FCF: if growth is \~11%, you'd want to buy below an 11x P/FCF multiple.
Current P/FCF: 9.88
**But here's what most people miss**
I charted the P/FCF ratio over time and drew a line at 11 (our growth estimate). It wasn't until 2024 that PYPL actually dipped below this threshold. Before that? You were always paying a premium relative to the growth rate.
So yeah, the P/E has been "low" for a while. But the P/FCF relative to actual growth has only recently become attractive. That's a short window we're in right now.
**The "value trap" question**
Fair question. But the difference between a value trap and a value opportunity is often just whether you bought at the right price. A lot of people jumped in at sub-15 P/E thinking they were getting a deal, bought at $70, and are now staring at $56.
A low P/E isn't everything. Waiting for multiple metrics to line up P/E, P/FCF, growth rate alignment gives you a safer entry.
**TLDR:**
PYPL is finally trading below its historical FCF growth rate for the first time. Multiples are at rock-bottom historical percentiles. Doesn't mean it's a screaming buy, but it means it's worth serious due diligence instead of dismissing it as a "value trap" without looking at the numbers.
Charts reiterating the same points [here](https://open.substack.com/pub/companycharts/p/get-in-were-doing-pypl?utm_campaign=post-expanded-share&utm_medium=web)