PayPal’s demerger from Ebay as a standalone company in 2015 was frequently lauded as a success.
Indeed, prices rose 8-10x a few years after PYPL’s listing, with the pandemic accelerating its price growth.
But the world of technology has changed markedly over the past years. Now, you can pay a large chunk of goods with Apple Pay with a quick swipe of your face. Ebay transactions no longer pivot exclusively to PayPal; Revolut, Wise and others have emerged as competitors.
In other words, the global payment landscape is very crowded and competition is keen.
Paypal’s cyclical price decline (1-year performance -53%) reflects this. But its fall was not a singular occurrence.
Square Inc (now Block, ticker: XYZ) is also struggling to rebound from its lows. Its share price is trading at 80% below the 2021 highs.
So what should we expect from PayPal in a year?
Given PYPL’s poor technicals (prices at 9-year low) and deteriorating Wall Street sentiment towards the stock, PYPL’s near-term price trajectory points firmly south. I expect the stock to probe the all-time lows at $30 some time later this year.
The base case scenario is $25-35 by the end of 2026. Should the new CEO manage to surpass market expectations, a tentative climb back into the forties is possible.
