PayPal seen as a buy under $45 with strong Q1 and $1.5B cost savings plan

PayPal is considered a contrarian buy at under $45, trading below 9 times forward earnings despite recent struggles. The company beat Q1 expectations with adjusted EPS of $1.34 and $8.4 billion revenue, showing 7% year-over-year growth and an 11% increase in total payment volume. PayPal is restructuring into three business units aiming to save $1.5 billion over 2-3 years and is integrating AI to modernize operations. While guidance is conservative with flat outlook through 2026, growth is expected to resume in 2027, supported by share buybacks and a new dividend to enhance shareholder value.