TLDR
- PayPal shares have plummeted 85% from their July 2021 peak, currently trading around $45
- A short-lived 25% surge in late February driven by Stripe takeover speculation has given back roughly 10%
- Branded checkout payment volume expanded only 1% year-over-year in Q4, versus 6% growth the previous year
- Enrique Lores, previously leading HP, replaced CEO Alex Chriss effective March 1
- Neutral ratings from Bank of America and KGI Securities with price targets at $48 and $55 respectively
PayPal (PYPL) experienced a temporary resurgence in late February. Market chatter suggested Stripe might be considering a purchase of the company or select divisions, propelling shares upward by as much as 25% from recent multi-year lows.
The rally proved short-lived. When it became apparent the acquisition rumors lacked credibility, shares retreated approximately 10% and now sit around $45 — returning to price levels reminiscent of 2017.
Shares currently command a forward P/E ratio near 8. While that appears inexpensive on its face, it signals the market’s skepticism about any substantial growth recovery materializing.
PayPal closed out 2025 with 439 million active accounts — merely 13 million more than five years prior. Annual revenue climbed 4%. These figures don’t suggest a company operating at full strength.
Fourth Quarter Results Sparked Concern
The branded checkout segment, traditionally among PayPal’s most profitable offerings, delivered Q4 payment volume expansion of only 1% year-over-year. This represented a sharp deceleration from the 6% growth recorded in the comparable quarter one year earlier.
The timing proved particularly damaging. The fourth quarter encompasses critical holiday shopping periods, making weakness during this window especially troubling for investors.
PayPal’s latest earnings release compounded the pressure. Both revenue and earnings fell short of Wall Street forecasts. Management subsequently provided conservative projections for 2026, which investors interpreted as acknowledgment that competitive headwinds remain strong.
A pending class action lawsuit claiming that PayPal provided misleading statements regarding its payment platform growth prospects has introduced additional complexity to the investment thesis.
CEO Transition Compounds Uncertainty
March 1 marked the departure of Alex Chriss as CEO. Enrique Lores, HP’s former chief executive, assumed the top position. The shift came without warning and surprised portions of the investment community.
Mid-turnaround leadership transitions typically don’t generate immediate investor enthusiasm. Market participants will look for early indications of strategic direction from Lores before revising their outlook.
The upcoming May earnings announcement now represents the next critical moment. PayPal must demonstrate that growth metrics are finding a floor and that leadership possesses a viable strategy moving forward.
Financially, the situation looks somewhat brighter. PayPal produced $5.6 billion in free cash flow during 2025 and maintained $14.8 billion in cash, equivalents, and investments at year-end, compared to $11.6 billion in total debt.
The platform also enjoys network effects — expanding merchant and consumer participation enhances value for all ecosystem participants.
Bank of America and KGI Securities analysts have both assigned Neutral ratings to the stock. Their respective price targets of $48 and $55 exceed current trading levels but fall short of strong buy recommendations.
PYPL’s trajectory will largely depend on whether the May earnings release provides investors with tangible reasons for optimism.
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