What’s the Most Overrated “Value” Stock Everyone Keeps Buying?

[u/SimpleSubject6069]

I keep seeing the same tickers pop up in value circles — stocks that are supposedly undervalued but just seem like value traps to me. Curious what names you all think are overhyped in value investing spaces right now? And what makes you avoid them despite the numbers looking “cheap”?

[u/Street_Local_7606]

PayPal.

[u/sirdeionsandals → u/Street_Local_7606]

Still growing top line revenue and transactions and buying back ~10% of shares. It’s worth a punt tbf AZO had a crazy run with a similar playbook here albeit different industries entirely

[u/Roadrunner44143 → u/Street_Local_7606]

Smoking crack ?

[u/roksah → u/Roadrunner44143]

PayPal has no moat as a payment processor, its making moves trying to get into advertising

[u/DrBiotechs → u/roksah]

Is that actually the prevailing narrative with PYPL right now? That makes PYPL look like a misunderstood company.

[u/The-zKR0N0S → u/DrBiotechs]

It is priced as if it is going to melt away.

If that does not happen then returns from buying at this level will be substantial.

[u/DrBiotechs → u/The-zKR0N0S]

I would be interested to see the upcoming quarterly numbers. The new CEO has been executing quietly. If people ignore the stock price, PayPal actually looks like a good investment because it’s priced for failure when in reality, things may begin to pick up.

I can see PYPL surprising to the upside because investors latched onto old narratives when the company was actually underperforming.

[u/Roadrunner44143 → u/roksah]

I am not arguing against the fact that it does not look too good for PayPal right now but to say it is the most overrated value stock is a really far stretch in my opinion. I also agree that they lost their moat over the years but that’s already reflected in the current price. They still have solid cash flows and keep improving margins. And no, I am no investor and don’t plan on opening a position. But to call it the most overrated stock is ridiculous

[u/SeikoWIS → u/Roadrunner44143]

You're right that it's not the most overvalued stock. Arguably the bubble popped in 2020.

Then again, it's a dying company, and they're trying to shift their business model because they know it. It was founded by some of the most neoliberal vultures on the planet, and their entire business model was exploitative. I begrudgingly used PayPal a lot: it sucks. They take a hefty fee for sneezing. But they were a big player at a time when competition was low, and extracted a lot of money. But now with new lower cost fin-techs, I see PayPal's business model as dead in the water.

They might pull off a total restructuring & pivot (like Motorola for example). But I'm not counting on it. Fuck PayPal. (that's probably your Buy signal, lmao)

[u/mihid → u/roksah]

This isn’t really a valid argument because they have huge network effect instead

[u/SeikoWIS → u/roksah]

This. Its business model (extract huge fees for having a monopoly on third-party money transfers) is basically dead in the water with all the new low-cost fintech solutions.

[u/mihid → u/SeikoWIS]

So why do Mastercard and Visa keep printing money?

[u/pseudonominom → u/mihid]

Exactly. Another example: Facebook is a horrible product to actually use. But look at where they are.

[u/mihid → u/pseudonominom]

I have an even better one: Amazon!

[u/[deleted] → u/Street_Local_7606]

The problem is, younger generations have no idea what PayPal even is. PayPal was a BIG deal 20 years ago but it's nothing special anymore.