PYPL's Q4 shows Venmo momentum and AI bets, but weak 2026 outlook and checkout slowdown raise stakes in fintech faceoff with XYZ.
PayPal Holdings, Inc. has experienced a steep price decline, dropping roughly one-third in recent weeks, despite appearing fundamentally undervalued. While PYPL's challenges have centered on weakness in its branded checkout offering, they point to a broader shift underway across payment processing. Rapid adoption of swipe payments, Apple Pay, instant payments, BNPL, and peer-to-peer apps is reshaping the fintech and banking sector.
If you have been closely watching shares of PayPal ( NASDAQ:PYPL ), you haven't missed its 30.7% collapse year-to-date, with retail investor sentiment on Reddit turning sharply bearish.
After reporting a mixed quarter last week, PayPal ( PYPL ) not only cratered 20% but shares fell into the cellar of the Zacks Rank as most analysts lowered full year 2026 and 2027 EPS estimates. This year's Zacks EPS consensus dropped from $5.83 to $5.38, representing projected growth of only 1.3%.
PayPal Holdings, Inc. remains a 'Strong Buy' despite a 41% decline in three months and nearly 90% off all-time highs. PYPL faces CEO turnover, disappointing results, lowered 2026 guidance, and intensifying competition, yet maintains solid operating margins and stable free cash flow. Valuation multiples have collapsed to all-time lows—7.6x earnings and 7.1x free cash flow—creating a compelling deep value opportunity.
PayPal: An Overextended Sell-Off Creating The Perfect Buying Opportunity
Paypal (PYPL) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
PayPal shares plunged ~25% post-Q4 earnings and CEO replacement, raising questions about future prospects versus further downside. Despite intense competition and a lost moat, PYPL continues to grow revenue, net income, and total payment volume, especially via PayPal, Venmo, and Braintree. Q4 and full-year 2025 results show stable financials and over $6B in adjusted free cash flow, though growth appears flat.
PayPal stock plummeted by +20% after Q4 earnings, indicating that the company has been losing market share, and FY2026 will be a transitional year. Q4 earnings missed estimates, and the FY2026 outlook suggests declines across all financial metrics. Management has withdrawn the FY2027 outlook provided during the 2025 Investor Day due to rising competition, and a new CEO has been hired to improve execution.
PayPal (PYPL) shares have decreased by 24.1% over five trading days. The recent decline highlights worries regarding missed earnings, a weak profit forecast, and a slowdown in branded checkout growth during a leadership transition.
PayPal Holdings faces a structural crisis, with its core branded checkout growth stagnating and investor confidence severely impaired. Management turnover and a pivot to AI under new CEO Enrique Lores raise doubts about PYPL's ability to compete with Apple Pay and Google Wallet. Venmo and BNPL segments show growth but remain too small to offset core business weakness. Overall revenue growth guidance is now low single-digit for FY2026.
PayPal (PYPL) is rated a Strong Buy, with deep undervaluation, robust cash flows, and strong financials outweighing recent operational and market headwinds. PYPL offers a 15%+ buyback yield and trades at a compelling ~7x P/FCF following the crash, with $6B+ in expected buybacks for 2025 and 2026. The incoming CEO, with a strong track record at HPQ, could potentially drive innovation and adapt to rapid payments industry changes.