4 Red Flags for PayPal's Future

PayPal Holdings (NASDAQ: PYPL) was once considered a top long-term play on the growing digital payments market. But over the past 12 months, its stock price has tumbled 60% and erased all of its gains from the previous three years.

That precipitous decline was caused by three consecutive quarters of mixed earnings, a rumored bid for Pinterest that suggested it was desperate for growth, and weak near-term guidance. The broader sell-off in higher-growth tech stocks exacerbated that pain.

Some investors might now be drawn to PayPal as a value play, since it looks historically cheap at 24 times forward earnings. However, they should review these four bright red flags before pulling the trigger.

Continue reading

Source Fool.com