- This topic has 3 replies, 4 voices, and was last updated 1 day, 9 hours ago by Jackson Wong.
I’d be interested in your predictions for the Paypal share price in a year? The PYPL share price has just been hit based on slowing growth and the CEO leaving. I can absolutely see how Paypal is becoming a relic in the world of online payments. It’s clunky, expensive for businesses, and individuals receiving payments (2.5%), and it’s FX rates are an absolute joke at upto 4%, which is nearly as bad as high street banks. Considering buying some out of the money one-year puts to tuck away…
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.
I think the 5-year chart of PayPal Holdings tells you what you need to know about the stock and its prospects.
Back in July 2021 they were trading around $311.00 per share. Yesterday they closed at $41.70, down by -20.31% the biggest one day fall in the name for 4-years, as the company missed Wall Street’s forecast for Q4 2025 earnings, and announced that it was appointing a new CEO to replace Alex Chriss, who was only appointed in 2023. But who failed to implement a turnaround plan in that time.
HP Inc CEO Enrique Lores will take over from Mr Chriss on March 1st.
The stock is not without hope however, with nearly $32.0 billion in annual sales and 5-year earnings and revenue growth at 89.80% and 78.92% respectively. Whilst profit margins sit at +13.0%.
And following yesterdays fall the stocks market cap sits at a -$3.0 billion discount to its Enterprise Value.
Most telling of all though is the fact the stock has underperformed the S&P 500 by -68.81% over 12 months.
There is potential for a turnaround in the business, which could also be target for activists or PE investors, looking to unlock shareholder value. Which is often achieved through a combination of cost cutting, streamlining and disposals.
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.
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