PayPal (PYPL) had a brief moment in the sun in late February. Rumors circulated that Stripe was exploring an acquisition of all or part of the company, sending the stock up as much as 25% from multi-year lows.
PayPal Holdings, Inc., PYPL
That move didn’t last long. Once it became clear there was no substance behind the speculation, the stock retraced around 10% and is now hovering near $45 — back in the neighborhood of levels last seen in 2017.
The stock currently trades at a forward price-to-earnings ratio of around 8. That’s cheap by almost any measure, but it reflects how little confidence the market has in a meaningful growth rebound.
PayPal ended 2025 with 439 million active accounts — up just 13 million versus five years earlier. Full-year revenue grew 4%. Those aren’t the numbers of a company firing on all cylinders.
The branded checkout business, historically one of PayPal’s highest-margin products, reported Q4 payment volume growth of just 1% year over year. That compares to 6% growth in the same period a year earlier.
The timing stung. Q4 is the peak holiday shopping season, so weakness there carries extra weight with investors.
PayPal’s most recent earnings report added to the pressure. Revenue and earnings both came in below analyst expectations. Management then issued cautious guidance for 2026, which the market read as an admission that the competitive environment isn’t getting easier.
A class action lawsuit alleging that PayPal misled investors about the growth potential of its payment platforms has added another layer of uncertainty.
On March 1, Alex Chriss was out as CEO. Enrique Lores, who previously ran HP, stepped in. The transition was unexpected and caught some investors off guard.
Leadership changes mid-turnaround rarely inspire confidence right away. The market will want to see early signals of direction from Lores before reassessing.
The May earnings report is now the next major catalyst. PayPal needs to show that growth is stabilizing and that management has a credible path forward.
On the balance sheet, the picture is more encouraging. PayPal generated $5.6 billion in free cash flow in 2025 and held $14.8 billion in cash, equivalents, and investments at year-end, against $11.6 billion in debt.
The platform also benefits from a network effect — more merchants and consumers using the system makes it more valuable for everyone involved.
Analysts at Bank of America and KGI Securities both rate the stock Neutral. Their price targets sit at $48 and $55, respectively, both above the current price but not exactly a ringing endorsement.
The next move for PYPL will hinge on whether the May earnings report gives investors something concrete to work with.
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