PayPal's Growth Slows, Stock Appears Undervalued
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy PYPL?
Source: NASDAQ.COM
- Growth Challenges: PayPal's stock has declined approximately 40% over the past three years due to stalled account and sales growth, although its current P/E ratio of nine times earnings suggests potential undervaluation.
- Revenue Setbacks: The loss of eBay as a payment partner in 2018 throttled PayPal's revenue growth, and while the pandemic provided temporary relief, sustaining that momentum has proven difficult amid increasing competition.
- Declining Take Rates: PayPal's transaction take rate has dropped from 2.89% in 2015 to 1.66% in 2025, primarily due to reliance on lower-margin platforms like Braintree and Venmo, which has pressured overall profitability.
- Future Outlook: Analysts expect PayPal's revenue and EPS to grow at CAGRs of 4% and 6% from 2025 to 2028, respectively, with the potential for its stock to double to over $100 in the next three years, contingent on stabilizing its profitability metrics.
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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: 44.670
Low
51.00
Averages
72.86
High
100.00
Current: 44.670
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.
PayPal's Growth Outlook for the Next Three Years
- Stock Decline: PayPal's stock has fallen approximately 40% over the past three years due to stagnant account and sales growth, although it currently trades at a historically low P/E ratio of nine times earnings, indicating potential undervaluation.
- Revenue Growth Constraints: Following eBay's switch to Adyen in 2018, PayPal's revenue growth faced significant throttling; while the pandemic provided temporary relief, sustaining that momentum has proven challenging amid increasing competition.
- User Growth Stagnation: From 2022 to 2025, PayPal's active accounts grew marginally from 435 million to 439 million, yet its revenue increased at a 6% CAGR, primarily driven by enhanced transaction frequency per user and effective cost management.
- Future Growth Expectations: Analysts forecast that from 2025 to 2028, PayPal's revenue and EPS will grow at CAGRs of 4% and 6%, respectively, with steady growth anticipated through the introduction of new products and services, enhancing its market position.
See More
PayPal's Growth Slows, Stock Appears Undervalued
- Growth Challenges: PayPal's stock has declined approximately 40% over the past three years due to stalled account and sales growth, although its current P/E ratio of nine times earnings suggests potential undervaluation.
- Revenue Setbacks: The loss of eBay as a payment partner in 2018 throttled PayPal's revenue growth, and while the pandemic provided temporary relief, sustaining that momentum has proven difficult amid increasing competition.
- Declining Take Rates: PayPal's transaction take rate has dropped from 2.89% in 2015 to 1.66% in 2025, primarily due to reliance on lower-margin platforms like Braintree and Venmo, which has pressured overall profitability.
- Future Outlook: Analysts expect PayPal's revenue and EPS to grow at CAGRs of 4% and 6% from 2025 to 2028, respectively, with the potential for its stock to double to over $100 in the next three years, contingent on stabilizing its profitability metrics.
See More
Market Dynamics and Company Outlook
- Oil Price Fluctuations: Brent crude oil prices surged by 4%, surpassing $117 per barrel, leading U.S. gas prices to exceed $4 per gallon; while the S&P 500 is expected to open higher, the market faces cost pressures from rising oil prices, potentially impacting overall economic recovery.
- Marvell and Nvidia Partnership: Marvell shares surged nearly 10% after announcing a strategic partnership with Nvidia, which will invest $2 billion to enhance the connectivity of Marvell's custom processors with Nvidia's networking technology, thereby strengthening Marvell's competitive position in the AI chip market.
- McCormick Acquires Unilever's Food Business: McCormick announced a $45 billion deal to acquire Unilever's food business, which will significantly expand its market share in spices and condiments, despite reporting only 1.2% organic sales growth in the last quarter, enhancing brand influence.
- Wells Fargo Downgrades Ford: Wells Fargo cut its price target for Ford from $11 to $10 and reiterated a sell rating, with analysts concerned that the fallout from the Iran war will increase raw material and freight costs, potentially impacting the profitability of automakers.
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- Market Capital Showdown: In this episode, Motley Fool analysts Emily Flippen and Bill Barker faced off in a market cap range challenge involving 10 companies, engaging listeners and enhancing the show's interactivity.
- Championship Battle: Emily, the reigning Market Cap Game Show world champion, showcased her investment analysis skills against Bill, ultimately winning with a score of 7 to 3, solidifying her champion status.
- Investor Education: The show utilized a fun game format to help listeners understand the significance of market caps, increasing public interest in investing and promoting financial literacy.
- Industry Insights: Analysts discussed the market performance of various companies, including Adyen and PayCom, providing deep insights into current market dynamics to assist investors in making informed decisions.
See More
Wall Street's Latest Ratings Overview
- Visa and Mastercard Ratings: Loop initiates coverage on Visa and Mastercard with a buy rating, anticipating significant net revenue growth driven by market share gains and upside from foreign exchange volatility, enhancing their competitive edge in the payment processing sector.
- Arista and Cisco Buy Ratings: Truist initiates buy ratings for Arista Networks and Cisco, citing their high-quality business scale and thematic attractiveness, particularly in the data center growth space, which presents underappreciated opportunities.
- 10X Genomics Upgrade: William Blair upgrades 10X Genomics from market perform to outperform, highlighting its pivotal role in AI drug discovery and improved profitability, which is expected to drive future growth following five consecutive topline beats.
- MiniMed Platform Outlook: Morgan Stanley initiates MiniMed at overweight with a $19 price target, projecting that its differentiated diabetes management platform will drive growth and margin expansion, particularly given the significant underpenetration in the U.S. market.
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PayPal Faces Lawsuit Over Misleading Investor Claims
- Lawsuit Background: Hagens Berman has filed a securities class action against PayPal Holdings, Inc., alleging that management misled investors during the period from February 25, 2025, to February 2, 2026, resulting in significant investor losses.
- Leadership Change: The lawsuit follows a surprise leadership change and the abrupt withdrawal of long-term financial targets, which were central to the company's growth narrative, potentially undermining investor confidence.
- Legal Allegations: The complaint alleges that PayPal violated federal securities laws throughout the class period, particularly regarding misleading claims about 'Branded Checkout,' highlighting a significant disconnect between the company's public optimism and its internal operational reality.
- Investor Action: Investors are urged to apply for Lead Plaintiff status by April 20, 2026, to seek recovery for losses incurred during the class period, underscoring the importance of investor participation in the legal process.
See More
PayPal's Growth Outlook for the Next Three Years
- Stock Decline: PayPal's stock has fallen approximately 40% over the past three years due to stagnant account and sales growth, although it currently trades at a historically low P/E ratio of nine times earnings, indicating potential undervaluation.
- Revenue Growth Constraints: Following eBay's switch to Adyen in 2018, PayPal's revenue growth faced significant throttling; while the pandemic provided temporary relief, sustaining that momentum has proven challenging amid increasing competition.
- User Growth Stagnation: From 2022 to 2025, PayPal's active accounts grew marginally from 435 million to 439 million, yet its revenue increased at a 6% CAGR, primarily driven by enhanced transaction frequency per user and effective cost management.
- Future Growth Expectations: Analysts forecast that from 2025 to 2028, PayPal's revenue and EPS will grow at CAGRs of 4% and 6%, respectively, with steady growth anticipated through the introduction of new products and services, enhancing its market position.
See More
PayPal's Growth Slows, Stock Appears Undervalued
- Growth Challenges: PayPal's stock has declined approximately 40% over the past three years due to stalled account and sales growth, although its current P/E ratio of nine times earnings suggests potential undervaluation.
- Revenue Setbacks: The loss of eBay as a payment partner in 2018 throttled PayPal's revenue growth, and while the pandemic provided temporary relief, sustaining that momentum has proven difficult amid increasing competition.
- Declining Take Rates: PayPal's transaction take rate has dropped from 2.89% in 2015 to 1.66% in 2025, primarily due to reliance on lower-margin platforms like Braintree and Venmo, which has pressured overall profitability.
- Future Outlook: Analysts expect PayPal's revenue and EPS to grow at CAGRs of 4% and 6% from 2025 to 2028, respectively, with the potential for its stock to double to over $100 in the next three years, contingent on stabilizing its profitability metrics.
See More
Market Dynamics and Company Outlook
- Oil Price Fluctuations: Brent crude oil prices surged by 4%, surpassing $117 per barrel, leading U.S. gas prices to exceed $4 per gallon; while the S&P 500 is expected to open higher, the market faces cost pressures from rising oil prices, potentially impacting overall economic recovery.
- Marvell and Nvidia Partnership: Marvell shares surged nearly 10% after announcing a strategic partnership with Nvidia, which will invest $2 billion to enhance the connectivity of Marvell's custom processors with Nvidia's networking technology, thereby strengthening Marvell's competitive position in the AI chip market.
- McCormick Acquires Unilever's Food Business: McCormick announced a $45 billion deal to acquire Unilever's food business, which will significantly expand its market share in spices and condiments, despite reporting only 1.2% organic sales growth in the last quarter, enhancing brand influence.
- Wells Fargo Downgrades Ford: Wells Fargo cut its price target for Ford from $11 to $10 and reiterated a sell rating, with analysts concerned that the fallout from the Iran war will increase raw material and freight costs, potentially impacting the profitability of automakers.
See More
Market Cap Game Show: Emily vs. Bill Showdown
- Market Capital Showdown: In this episode, Motley Fool analysts Emily Flippen and Bill Barker faced off in a market cap range challenge involving 10 companies, engaging listeners and enhancing the show's interactivity.
- Championship Battle: Emily, the reigning Market Cap Game Show world champion, showcased her investment analysis skills against Bill, ultimately winning with a score of 7 to 3, solidifying her champion status.
- Investor Education: The show utilized a fun game format to help listeners understand the significance of market caps, increasing public interest in investing and promoting financial literacy.
- Industry Insights: Analysts discussed the market performance of various companies, including Adyen and PayCom, providing deep insights into current market dynamics to assist investors in making informed decisions.
See More
Wall Street's Latest Ratings Overview
- Visa and Mastercard Ratings: Loop initiates coverage on Visa and Mastercard with a buy rating, anticipating significant net revenue growth driven by market share gains and upside from foreign exchange volatility, enhancing their competitive edge in the payment processing sector.
- Arista and Cisco Buy Ratings: Truist initiates buy ratings for Arista Networks and Cisco, citing their high-quality business scale and thematic attractiveness, particularly in the data center growth space, which presents underappreciated opportunities.
- 10X Genomics Upgrade: William Blair upgrades 10X Genomics from market perform to outperform, highlighting its pivotal role in AI drug discovery and improved profitability, which is expected to drive future growth following five consecutive topline beats.
- MiniMed Platform Outlook: Morgan Stanley initiates MiniMed at overweight with a $19 price target, projecting that its differentiated diabetes management platform will drive growth and margin expansion, particularly given the significant underpenetration in the U.S. market.
See More
PayPal Faces Lawsuit Over Misleading Investor Claims
- Lawsuit Background: Hagens Berman has filed a securities class action against PayPal Holdings, Inc., alleging that management misled investors during the period from February 25, 2025, to February 2, 2026, resulting in significant investor losses.
- Leadership Change: The lawsuit follows a surprise leadership change and the abrupt withdrawal of long-term financial targets, which were central to the company's growth narrative, potentially undermining investor confidence.
- Legal Allegations: The complaint alleges that PayPal violated federal securities laws throughout the class period, particularly regarding misleading claims about 'Branded Checkout,' highlighting a significant disconnect between the company's public optimism and its internal operational reality.
- Investor Action: Investors are urged to apply for Lead Plaintiff status by April 20, 2026, to seek recovery for losses incurred during the class period, underscoring the importance of investor participation in the legal process.
See More
