Cal Poly Finance Team Makes Advances in Global Competition With Analysis of PayPal Stock Outlook – Cal Poly News


Business students won local, regional titles in the CFA Investment Research Challenge and achieved the highest level of any team in the university’s Orfalea College of Business

SAN LUIS OBISPO — A detailed analysis of PayPal’s stock prospects with a sell rating helped a team of Cal Poly finance students outperform hundreds of others in the Chartered Financial Analyst Institute’s recent research challenge.

Competing against over 900 schools from across the Americas, the Cal Poly team was one of just 17 to advance to America’s semifinals this month after winning the local and sub-regional stages. The global competition includes over 5,000 undergraduate and graduate students from universities in more than 91 countries. Students are tested on their analysis, assessment, reporting and presentation skills.

For the competition, the students were tasked with conducting an analysis of PayPal, a San Jose-based company that provides financial transaction processing services. The team spent five months putting together a report — which included information about PayPal’s business model, an industry overview, risks, and more — before issuing a recommendation to sell PayPal stock, forecasting that its value will increase by 10% within a year would drop by more than 12 percent.

“Developing this report could be one of the most difficult and extensive projects we have ever worked on,” said team captain Alexandra Joelson of San Diego. “We were limited to 10 core pages and 10 appendix pages. While that may seem like a lot, we had such a large amount of research and analysis and it was difficult to stay within that page limit.”

The team also included: Cameron Wong and Dominic Juliano, both from San Francisco; Samuel Paik of Orinda, California; and Walnut Creek, California resident Shingo O’Flaherty.

“Our team members recognized each individual’s skills and talents early on,” said faculty advisor Cyrus Ramezani, professor of finance at Orfalea College of Business. “Then they divided up the work and specialized to be most effective. This is how our students come closest to a real experience. It’s also one of the best examples of our ‘learn by doing’ mantra at Orfalea College of Business.”

Cal Poly alumnus Scott B. Kirk (Business Administration, Financial Management, ’05) also served as team advisor.

After assignments were assigned, the team researched PayPal, its market and revenue drivers, and then worked as a team to develop a detailed financial model, write a comprehensive report, and prepare their presentations.

“This financial model helped us draw important conclusions that could drive our sales story,” said Joelson.

That story, Ramezani said, was delivered in a well-written and thoroughly developed report — with extensive use of graphs and charts — that portfolio managers could use to make investment decisions.

“The students also created a comprehensive slide deck and gave several presentations to industry professionals (the judges),” he said. “They are expected to clearly present and defend their analysis and investment recommendation.”

According to her research, PayPal’s competitors include Apple Pay, Google Pay, and Zelle, a digital payments network backed by financial institutions such as Bank of America, Capital One, JPMorgan Chase, and Wells Fargo.

PayPal’s current demographic consists primarily of consumers between the ages of 35 and 55. While the company has benefited from the shift to online shopping, particularly during the pandemic, interventions by powerful competitors, rising interest rates and inflation, and geopolitical risks are all contributing to a questionable stock future, the team concluded.

Since the project lasted several months, this analysis was subject to change. The report even refers to the 2 month old war in Ukraine that started during the project.

“Due to the volatility of the market and the constant swings in PayPal news, it has been extremely difficult to update our presentation,” said Joelson. “The team created a plan of exactly what we wanted updated to ensure we had the most up-to-date and accurate presentation possible.”

After winning the local competition in San Francisco (16 teams), the team also advanced from the Western US round to the Americas semifinals. Cal Poly didn’t make it to the Americas Finals, which takes place on April 28th.

“The competition is extremely competitive in the semifinals and we were eliminated by maybe a fraction of a point,” said Ramezani. “Nevertheless, our students have reached this level for the first time and we are proud of the work our team has done.”

The project provided the students with important skills that will prepare them for their future careers, Joelson said.

“This experience felt like a real project as we needed to continuously follow the market and stay current.”

Photo Information: A team of five students from Orfalea College of Business has reached the next level of the Chartered Financial Analyst Institute 2021-22 research challenge. Finance students, from left, Dominic Juliano, Samuel Paik, Alexandra Joelson (team captain), Cameron Wong and Shingo O’Flaherty represented Cal Poly in the annual global competition.
Photo by Austin Ma

Contact: Pat Pemberton

April 26, 2022

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