Roku, PayPal, and Etsy Show Signs of Rebound Potential

Roku, PayPal, and Etsy have plummeted over 70% from highs, underperforming against a 63% rise in the S&P 500 since 2021. While Roku's active accounts soar, both PayPal and Etsy reveal strategies for improvement. Investors may see reasons for optimism in 2025.

Date: 26-01-2025

AI Rating: 5

Performance Overview: The report highlights that Roku, PayPal, and Etsy have witnessed significant declines, dropping at least 70% from their all-time highs in 2021. In stark contrast, the S&P 500 index has risen substantially, which complicates the investment landscape for these stocks.

Despite the steep drops, there are indicators of potential growth for Roku and PayPal, while Etsy seeks new strategies for recovery.

Roku Analysis: Roku's active accounts have increased from 60 million to 90 million in three years, marking a 50% growth. This rising user base lays a strong foundation for potential revenue increase through advertising, which currently dominates its revenue model. With recent product developments like Roku Data Cloud aiming to enhance advertising transparency, it is feasible to expect a rebound in advertisers' interest.

PayPal Analysis: PayPal's stock price is near $90, needing an 11% rise to exceed $100. Recent leadership changes and contract renegotiations within Braintree have reportedly improved profit margins, aligning with a significant 39% stock surge in 2024. This indicates that PayPal may be regaining its market relevance, enhancing prospects in the coming years.

Etsy Analysis: Currently trading at $53, Etsy faces the biggest climb to $100 (an 88% increase). The company has seen a slight dip in active buyers, but Q3 revenue still grew by 4% year over year due to improved pricing strategies. Etsy's push toward a loyalty program is aimed at recapturing buyer interest, suggesting that positive shifts could occur in 2025.

This analysis indicates a mixed outlook: Roku appears positioned for growth based on user expansion and advertising potential; PayPal shows promise with ongoing improvements in profit margins; however, Etsy's challenges posit it as a more uncertain investment in the short term.

Stocks: ROKU PYPL ETSY