PYPL vs PLTR：Why Fundamentals Alone Don’t Explain Stock Moves
While some investors believe stock prices are driven solely by fundamentals, price action often tells a different story. Fundamentals are undeniably important, but they do not always correlate with immediate price trends.
$PayPal(PYPL)$ is a prime example of this divergence. Despite boasting robust fundamentals and over $8 billion in revenue, the stock has been excessively punished. Five years after being a market favorite, it currently trades at just one-sixth of its 2021 peak. This illustrates why relying on fundamentals alone is often insufficient.
There are entirely valid fundamental reasons to buy PayPal. You could justify an investment based on its P/E ratio of 11, or the fact that Transaction Margin Dollars (gross profit) have grown +6-7% for several consecutive quarters, proving they are making more actual profit per transaction, not just processing empty volume. You could also point to the success of Fastlane, which is driving >80% guest checkout conversion versus the industry standard of 40-50%, the massive $15 billion share repurchase program that is actively boosting EPS, or the fact that Venmo is gaining traction, with debit card monthly active users up ~30%. However, this is the chart:
Are you willing to accept underperformance while the broader market leaves you behind? While PayPal has stagnated, the S&P 500 has delivered double-digit growth for three consecutive years gaining 24% in 2023, 23% in 2024, and 16% in 2025. Buying on fundamentals alone often means paying the price of opportunity cost.
On the other hand, we have $Palantir Technologies Inc.(PLTR)$ . Publicly traded since 2021, the same year PayPal peaked, its stock price is now 17 times higher than it was in September 2021. Remarkably, its revenue is just $1.1 billion. This contrast illustrates why relying on fundamentals alone is often insufficient; price action frequently dictates the trend regardless of the revenue on paper.
Yes, fundamentals must be assessed in the context of a sector and competitive landscape. These two examples are presented to drive home the point: they can analyze why PYPL has been so punished and PLTR so rewarded by the stock market, despite the massive revenue disparity.
That said, technical indicators are essential for assessing price action and making informed decisions, whether you are a long-term investor, a swing trader, or a day trader. Price action is the purest reflection of human psychology, and the right indicators allow us to decode it.
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