How Risky Is PayPal Holdings Stock?

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PayPal Holdings (NASDAQ: PYPL) and its digital wallet subsidiary Venmo just knocked another quarterly earnings report out of the park. Revenue and adjusted earnings per share increased a respective 23% and 29% year-over-year during the final months of 2020. The pandemic has benefited PayPal, as the world has been forced further down a digital path, and the company sees further double-digit percentage growth in 2021. 

In spite of the stellar growth figures, though, PayPal stock trades for a hefty 68 times full-year 2020 adjusted earnings per share. How risky would a purchase of the digital payments leader be at this juncture? Not nearly as risky as the premium price tag might lead some investors to conclude. 

Image source: Getty Images.

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