u/Fluffy_Scheme9321 ·
Reddit — r/ValueInvesting
· July 16, 2026 at 21:31
· ⬆ 15 pts
· 💬 27 comments
| View on Reddit ↗
AI Summary
Summary
The post compares Stripe’s ~$160B private valuation to PayPal’s ~$50B market cap, questioning why Stripe is so richly valued despite PayPal generating $5.5B in FCF vs Stripe’s $5B in revenue.
Author suggests PayPal has clear brand, switching costs, and strong cash generation, implying it may be undervalued (a “value play”) relative to Stripe.
Quality assessment: Speculation with some fundamental data; not deep DD but raises a credible valuation discrepancy.
Score15
Comments27
Upvote %94%
▶ Full Post Text
Hey,
Genuinely trying to gauge why this is. I know PayPal has recently been a value play, or value trap, based on how you see it. From what I understand, it's a mature business in a somewhat mature industry. It has a clear brand, and it is embedded across the internet, especially with non - software businesses. Last year it had $ 5.5 billion in FCF, compared to Stripe having 5 billion in revenue, and Stripe is valued at 160, whereas PayPal's market cap is 50. I know private markets are purposely as such, but still. I understand the inherent competition that PayPal has, but at the end of the day, it has switching costs, a clear brand, and it mints cash. Curious about your thoughts?
PayPal generated $5.5B in FCF last year while Stripe has ~$5B in revenue and a $160B valuation vs PayPal’s $50B market cap. The gap implies PayPal may be deeply undervalued if it can maintain cash flow and defend its competitive position. Long PayPal as a value play betting on mean reversion in relative valuation versus fast-growing peers. PayPal faces intense competition (e.g., Stripe, Block), decelerating growth, and potential margin compression.
This Reddit post, published July 16, 2026,
features u/Fluffy_Scheme9321
discussing PYPL.
1 trade idea extracted by AI with direction and confidence scoring.