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PayPal's Road to a $1 Trillion Market Cap by 2030

By Parkev Tatevosian, CFA and Connor Allen – Updated Dec 30, 2021 at 6:07PM

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PayPal is making headway in the digital payment industry through partnership.

In recent years, several large corporations have surpassed a market cap of $1 trillion. The milestone is usually evidence of business success. In this segment from "The Five" recorded on Dec. 14, contributor Connor Allen talks about one company he thinks could reach a $1 trillion market cap by 2030. 


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Connor Allen: I'd picked a company that I've talked about on a few shows and that is PayPal (PYPL 1.82%). PayPal is a $218 billion company last time that I looked and they require a CAGR of 19 percent to reach one trillion in nine years. If that can happen, then they would be at a trillion dollars. This is why I think that they could grow at that rate. It's because in the past seven years, revenue has grown at 15-20 percent annually and they are just now starting to be able to monetize Venmo in a relatively aggressive growth way versus the way that they've been doing it. They've had Venmo for a long time. It's just not been a big source of profits for them and now they are trying to figure that out and they are figuring that out.

They're doing this through partnerships that they've started to do. Now that the contract with eBay has ended, they have partnerships with Amazon, they have partnerships with United Airlines, partnerships with Walmart. They're trying to insert Venmo into a lot of our daily lives as consumers. Next year alone, they're going to have $1.2 trillion of transaction volume built through the business, that's PayPal and Venmo. Obviously, they're dealing with a lot of money as they are able to increase the monetization of that transaction volume, I think that this company can grow to a trillion dollars by 2030.

Obviously, they are trading at a relatively high price to sales right now and you're going to need that price to sales multiple to stay where it's at, which sometimes is iffy when a company is growing like that, because that can usually lower the price to sales. If you're expecting it to get to a trillion dollars, you need that price-to-sales to remain relatively where it is right now.  

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Connor Allen owns PayPal Holdings. Parkev Tatevosian owns Amazon. The Motley Fool owns and recommends Amazon and PayPal Holdings. The Motley Fool recommends eBay and recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, short January 2022 $1,940 calls on Amazon, and short January 2022 $82.50 calls on eBay. The Motley Fool has a disclosure policy.

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