PayPal Eyes Double-Digit EPS Growth By 2027, Teams Up With Verifone, J.P. Morgan & More
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 25 2025
0mins
Source: Benzinga
PayPal's Financial Outlook: PayPal Holdings, Inc. has projected adjusted EPS growth of 6%-10% and transaction margin dollar growth of at least 5%, with long-term expectations of 10%+ transaction margin growth and 20%+ adjusted EPS growth by 2027.
New Initiatives and Partnerships: The company is set to launch PayPal Open, a unified commerce platform, and expand partnerships with Verifone and J.P. Morgan Payments to enhance payment solutions for merchants, while also reporting a fiscal fourth-quarter revenue increase of 4% year-over-year.
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Analyst Views on PYPL
Wall Street analysts forecast PYPL stock price to rise
29 Analyst Rating
6 Buy
19 Hold
4 Sell
Hold
Current: 43.650
Low
51.00
Averages
72.86
High
100.00
Current: 43.650
Low
51.00
Averages
72.86
High
100.00
About PYPL
PayPal Holdings, Inc. offers a technology platform. The Company’s products are designed to enable digital payments and simplify commerce experiences for consumers and merchants to make selling, shopping, and sending and receiving money simple, personalized, and secure, online or offline, including mobile. It provides consumers with a digital wallet that enables them to send payments to merchants securely using a variety of funding sources, which include a bank account, a PayPal or Venmo account balance, its consumer credit products, a credit card, a debit card, certain cryptocurrencies, or other stored value products. It operates a global, two-sided network at scale that connects consumers and merchants with 434 million active accounts across approximately 200 markets. Its brands include PayPal, Braintree, Venmo, Xoom, Hyperwallet, PayPal Zettle, PayPal Honey, and Paidy. It offers financing products through the PayPal Working Capital (PPWC) and PayPal Business Loan (PPBL).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Management Controversy: Botha's management style at Sequoia has sparked controversy, particularly after he defended a colleague's widely criticized remarks, highlighting the complexities and challenges he may face in governance.
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- Market Valuation: Following the IPO, SpaceX's market cap reached $2.5 trillion, with Musk controlling over 82% of voting rights, limiting external shareholders' influence on governance, which could impact future investment decisions.
- Management Controversy: Botha's management style at Sequoia faced criticism, yet his addition to SpaceX may bring new perspectives and resources, helping the company maintain its competitive edge in the rapidly evolving aerospace market.
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Investment Comparison: Shift4 Payments vs PayPal
- Shift4 Growth Potential: Shift4 Payments reported nearly $4.2 billion in revenue for FY 2025, marking a 25.5% increase year-over-year, with a net income of approximately $119 million and a net margin of about 2.8%, indicating strong growth potential in the hospitality and entertainment sectors.
- PayPal Market Position: PayPal achieved roughly $33.2 billion in revenue for FY 2025, a 4.3% increase from the previous year, with a net income of around $5.2 billion and a net margin close to 15.8%, solidifying its leadership in the global payments market.
- Risks and Competition: Shift4 Payments faces intense competition from players like Adyen and Block, and its debt-to-equity ratio of 3.2x may limit capital flexibility during economic downturns, while PayPal continues to navigate significant legal scrutiny despite the dismissal of some securities fraud class actions.
- Valuation Comparison: With a forward P/E ratio of 6.5x, Shift4 Payments appears more attractively priced relative to PayPal's 8.2x, highlighting its relative advantage in future earnings expectations, particularly in the context of ongoing acquisitions and market expansion.
See More
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- Revenue Growth Comparison: Shift4 Payments reported nearly $4.2 billion in revenue for FY 2025, marking a 25.5% increase, while PayPal's revenue reached $33.2 billion with a 4.3% growth, indicating Shift4's robust growth potential in niche markets.
- Profitability Analysis: Shift4's net income was approximately $119 million with a net margin of 2.8%, whereas PayPal achieved a net income of $5.2 billion and a net margin of 15.8%, highlighting PayPal's superior profitability.
- Debt and Liquidity Status: Shift4's debt-to-equity ratio stands at 3.2x, indicating high financial leverage, while PayPal maintains a much lower ratio of 0.5x and a current ratio of 1.3, showcasing its stronger short-term debt coverage capability.
- Market Competition and Risks: Shift4 faces intense competition from companies like Adyen and Block, and its reliance on complex IT systems and AI tools increases vulnerability to cyberattacks and regulatory risks, while PayPal contends with significant legal scrutiny, particularly regarding consumer protection.
See More
Comparative Analysis of PayPal and SoFi
- Market Challenges for PayPal: PayPal's stock has fallen 32% over the past three years, and despite having 439 million active accounts, it faces fierce competition from companies like Apple and Alphabet, leading to declining margins and ineffective user engagement.
- User Growth of SoFi: SoFi's user base has surged from 5.22 million in 2022 to 14.70 million today, nearly tripling, while PayPal only added 3 million active accounts in the past year, translating to a mere 0.6% growth, highlighting SoFi's advantage in attracting younger consumers.
- Profitability Comparison: SoFi trades at nearly 30 times earnings, with an expected annual growth rate of 31% over the next three to five years, compared to PayPal's less than 8 times earnings and a growth rate of only 7% to 8%, indicating SoFi may be more attractive for long-term investors.
- Investment Risk Assessment: While SoFi's business model carries higher risks, including potential loan defaults and interest rate fluctuations, its superior market execution compared to PayPal positions it as a more appealing investment choice in the current competitive landscape.
See More
PayPal's Stagnant Growth vs. SoFi's Rise
- User Growth Comparison: PayPal boasts approximately 439 million active accounts, adding 3 million in the past year, translating to a mere 0.6% growth, indicating stagnation; in contrast, SoFi's user base surged from 5.22 million in 2022 to 14.7 million today, nearly tripling and showcasing strong market appeal.
- Changing Competitive Landscape: With giants like Apple and Alphabet entering the digital wallet space, PayPal faces fierce competition that has led to declining margins, particularly as its white-label payment business has not compensated for the profitability drop in its branded checkout segment, impacting overall financial health.
- Leadership Changes Impact: PayPal hired Intuit's CEO Alex Chriss in 2023 to rejuvenate its branded checkout business but fired him earlier this year; new CEO Enrique Lores will leverage his experience at HP to tackle market challenges, and this frequent leadership turnover may affect the coherence of the company's strategy.
- Investment Risks and Opportunities: While SoFi's valuation approaches 30 times 2026 earnings estimates, posing significant investment risks, its projected average earnings growth of 31% far exceeds PayPal's 7% to 8%, suggesting that SoFi may emerge as a more attractive long-term investment despite inherent loan risks in its business model.
See More
