I used to own this stock. Luckily, I got out around 80 bucks.
Looking ahead, it’s hard to know where it goes from here.
The stock does look cheap after its recent fall. Non-GAAP earnings per share (EPS) for 2025 came in at $5.31, so the trailing price-to-earnings (P/E) ratio is only about eight right now.
But it’s hard to see the stock getting a major upward valuation re-rating in the near term.
One issue is that guidance was dreadful. In its Q4 earnings report, the company said that EPS for 2026 could experience a ‘low-single digit decline’ or be ‘slightly positive’.
Another issue is that Apple has really eaten its lunch and is likely to continue doing so. Whether you’re using Apple Pay or the credit card details drop down feature, it’s just so much easier to pay with Apple than PayPal these days.
Also, as you mention, PayPal is really expensive in a lot of ways (e.g. international money transfer and receiving money). Today, there are a lot of platforms that are far superior from a user perspective (e.g. Wise) – these are likely to continue capturing market share.
Zooming in on broker activity, analysts are slashing their price targets for the stock after the Q4 report. Here are some recent price target downgrades:
HSBC: $72 to $47
Canacord Genuity: $100 to $42
Citi: $60 to $42
TD Cowen: $65 to $48
Looking at these targets, analysts clearly don’t expect a major rebound in the share price anytime soon.
Now, it’s worth noting that the company is bringing in a new CEO, Enrique Lores. The board believes that he can boost company performance.
However, while he has been on the PayPal board for a while, he doesn’t really have a payments background (he was previously CEO of HP). So, a turnaround is far from guaranteed.
Putting this all together, I’m not bullish on PayPal stock at the moment. We could see a small rebound in the share price at some stage, but I wouldn’t be surprised if the stock goes nowhere over the next 12 months.
