r/valueinvesting
PayPal and Nike: Genuine Value Plays or Value Traps at These Levels?
Author debates whether beaten-down giants PYPL and NKE are genuine value plays or value traps, outlining bull/bear cases for both.
- Both companies trade at historically depressed valuations relative to their current business scale amid extreme market pessimism.
- Significant price drawdowns do not automatically equate to cheap valuations if the underlying businesses face long-term structural decline.
I’ve been screening for beaten-down large caps and two names that keep popping up are PayPal (PYPL) and Nike (NKE).
Both stocks appear to be trading around levels not seen since roughly 2016–2017 (or even earlier in Nike’s case), despite being much larger businesses today. PayPal has fallen back to prices last seen around 2017, while Nike recently hit levels not seen in over a decade.
Bull case:
• PayPal is still generating significant cash flow, remains profitable, and trades at a much lower multiple than it did historically. 
• Nike is still one of the strongest consumer brands in the world and could benefit if management successfully executes its turnaround. 
• In both cases, the market seems extremely pessimistic.
Bear case:
• PayPal may be a classic value trap facing long-term competitive pressures and slowing growth. 
• Nike’s turnaround could take years, with continued weakness in China, consumer spending, and increased competition from newer athletic brands. 
• Just because a stock is down 70–90% from highs doesn’t automatically make it cheap.
For those who have looked into either company:
1. Which do you think offers the better risk/reward today: PYPL or NKE?
2. Are either of these actually undervalued, or are they simply businesses in long-term decline?
3. What assumptions are you using for earnings/cash flow 5 years out?
4. If you own either stock, what’s your thesis?
Interested in hearing both bull and bear cases. I feel like these are exactly the kinds of names value investors should be debating right now.
How many people do you know that uses PayPal
I see paypal everywhere still in modern society.
PayPal handles branded checkout, Braintree credit card processing, and in-app promotions for: eBay, Microsoft, Meta, Sony, Ticketmaster, Venmo, Spotify, Booking.com, Ticketmaster, Etsy, Lowe’s, Nike, Instacart, Walmart, Best Buy, Subway, Panera Bread, Vitamix, MLS Team San Jose Earthquakes stadium is PayPal Park, PayPal (via Venmo) is the jersey-patch sponsor of the NBA’s Phoenix Suns, and is an official partner of Spanish soccer club Mallorca and the Football Association (English soccer’s governing body).
So... Nobody
paypal was founded by the richest man in the world. It’s not going anywhere
I can tell you the answers you'll get.
Bulls: Everyone.
Bears: No one.
No in between.
It seems to skew heavily by age.
Under 40: almost everyone
40-65: 50/50
65+: very few
If you use Venmo, Uber, AirBNB or guest checkout at nearly any online retailor then you've used PayPal.
Me, for business. I don't like it but it's and option I use
I use it where possible. It's better than putting my credit card number on random vendors website. That said I prefer Google pay to it.
Depends where you live. In Germany it is default for online payments. PayPal also owns Venmo.
I own Nike and honestly I'm confident they'll turn it around. Still the biggest consumer brand in the world, has huge appeal and looks like a matter of time before they turn it around.
This will take time but it's extremely oversold imo.
I still buy Jordans and Nikes
PayPal atleast got a high FCF yield. It that doesn't decrease in the future that stock can mathematicaly work out well (similar to ebay with 2-3% revenue growth but a +15% CAGR because of huge share buybacks).
Nike is paypal but with a high valuation.
I actually have a fairly in-depth analysis written up on PayPal on my website (still under-construction).
Personally, I think it’s one of the best value plays in the market if you’re willing to hold beyond the short term. Rule of thumb (IMO) you shouldn’t own any stock that you aren’t willing to own for 5 years.
Here’s my analysis if you are interested!
https://valuedbyryley.com/post.php?id=2
my problem with Paypal is that if i'm gonna pay for a fintech, i might as well go an actually growing fintech at a cheap multiple. The sector is not exactly expensive to buy.
Days without PayPal being mentioned on r/ValueInvesting: 1 0
If not for the AI scam these companies would be worth a lot more. Retail is flooding AI plays and will end up holding the bag on the buildout.
I'm building a PayPal position with the simple expectation that buybacks continue at these prices.
However, the moat is evaporating and it is definitely not a "forever hold" and im threating it like a large cap cigar butt.
PayPal might be a good investment but hard to say due to no moat, Nike isn’t even cheap
Network effects, switching costs and scale are all moats
If the moat was strong then their growth wouldn’t be slowing and they would have more pricing power. Based on pricing in the sector it’s a bit of a race to the bottom
Growth is slowing because the market is maturing. PayPal has not really innovated in years, charges more than competitors who have a superior product, and has still managed to not only protect their current business, but achieve modest growth. If PayPal had no moat, then their revenue would be rapidly declining
MODS
Not liking nike fcf decline, flat revenue, gross margin decline.
Also world cup/nba finals/nhl finals happening now, nba biggest in years yet there doesnt seem to be any new exciting nike products launched. Even saw an article that wemby's sneakers are at 50% discount right now online
I don't like investing in stocks where I don't like their product, and I've been thoroughly unimpressed the last few Nike stores I've been in. The setup, employees, and experience were fine but the products are just not good.
The thesis is that we are kind of in the bottom of a cycle. If they can go back to 5B of FCF that’s a 13 P/FCF.
I haven’t bought because I think they made a lot of mistakes and still have a way to go to dig themselves out of the hole they put themselves in
Nike is a brand on the same cheap garbage everyone else sells. I have never been a customer so not sure how they porked up their brand but that is very difficult to undo.
Nike has a huge customer base son
They do a lot of revenue, but top line took a hit and doesnt look to be recovering. Their margins are collapsing, which is the real multiple destroyer. Speaks to weakness of the brand. Dividend is past danger levels and flashing warning. If they do not reclaim margin this thing has more downside.
This sub’s obsession with PYPL will never cease to amaze me. It’s an irrelevant payments processing platform FFS.
This subreddit doesn’t accept photos. No analysis for you, I guess 🤷♂️
I think that industry folks keeping it low so they can load up on STONKS
Nike revenue growth was all concentrated in China. Ever since Kobe died, so has the Nike brand in China. Kobe was by far the most popular American athlete in China. Nike is still trading at much higher multiples over rival brands like Lululemon, Deckers, and Crocs.
PayPal is a commodity payments platform getting beaten by Apple Pay, Google Pay, Amazon Pay, Walmart Pay, Alipay, WeChat Pay, Stripe, etc. There are Chinese diaspora communities in America where you pay for goods and services with Alipay and WeChat. There are too many competitors. This goes in the too hard pile at best.