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Barchart
Barchart
Mark R. Hake, CFA

PayPal Could Still Be 20% Too Cheap - Use Options to Play PYPL

PYPL PayPal Barchart ITM

PayPal Holdings (PYPL) stock could be worth 20% more, based on management's free cash flow (FCF) guidance and an average FCF yield metric. Investors can short out-of-the-money puts and calls, as well as buy long-dated in-the-money calls to play PYPL.

PYPL closed at $67.30 on Friday, Sept. 26, but it's well off a recent peak of $78.22 on July 28. However, it could be worth $81.00 per share. This is based on PayPal's own free cash flow guidance in its Q2 earnings release on July 29.

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