When I wrote my last article about PayPal ( PYPL ) in November, I was not expecting what had happened since then. Alex Chriss is no longer CEO; PayPal missed expectations for FY25 and set disappointing guidance. I believe that the narrative is partiallyThe stock market and value investing are my greatest passions. I bought my first shares at the age of 11, and since then, my fascination with capital markets has only grown stronger. Today, I look back on nine years of in-depth experience. Every day, I dive i ...

Core Insights - PayPal Holdings (PYPL) reported transaction revenues of $7.82 billion in Q4 2025, reflecting a 3% year-over-year growth and accounting for approximately 90.1% of its net revenues [1][8] - The growth in transaction revenues was driven by the rise in online shopping and mobile payments, contributing to solid quarterly results [1] Transaction Revenue Details - Transaction revenues primarily come from fees charged to merchants and consumers for payments processed through PayPal's platforms, calculated as a percentage of the transaction amount plus a fixed fee [2] - For Q4 2025, PayPal's transaction margin dollars (TM$) were reported at $4.03 billion, also up 3% year-over-year, with growth attributed to credit and omni initiatives, improved Payment Service Provider (PSP) profitability, and Venmo monetization efforts [3][8] Transaction Take Rate - The transaction take rate decreased by 9 basis points to 1.65% in Q4 2025, with a decline of about 7 basis points when excluding foreign exchange hedges [4] Peer Performance Comparison - Block's transaction revenues in Q3 2025 were $1.87 billion, up 9.4% year-over-year, representing 30.6% of its net revenues [5] - Payoneer Global's Q3 2025 total revenues were $270.9 million, up 9% year-over-year, with transaction revenue growth driven by increased transaction volume and improved SMB customer take rates [6] Valuation and Estimates - PayPal shares have declined 31% year-to-date, underperforming the broader industry and the S&P 500 Index [7] - The stock is trading at a forward 12-month P/E of 7.40X, significantly lower than the Zacks Financial Transaction Services industry's average of 18.15X, indicating a cheap valuation [9] - The Zacks Consensus Estimate for full-year 2026 EPS has been revised downward, suggesting a growth of only 1.3% year-over-year [10]

Core Viewpoint - PayPal is currently undervalued compared to its fintech peers, while SoFi Technologies is trading at a premium despite recent performance issues [1][4]. Group 1: PayPal Holdings - PayPal trades for less than 8 times forward earnings, making it cheaper than most fintech and major bank stocks [4]. - The company recently reported disappointing quarterly results, with revenue and adjusted earnings falling short of expectations, leading to a share price drop of over 20% [5]. - PayPal's branded checkout business, a key growth area, saw revenue growth decline from 6% in the prior year to just 1% this quarter [5]. - The company's 2026 guidance suggests either a "low-single digit decline" or "slightly positive" earnings growth, indicating a slow recovery [6]. - PayPal is undergoing a leadership change, with former HP CEO Enrique Lores replacing Alex Chriss, signaling a potential reevaluation of turnaround strategies [6]. Group 2: SoFi Technologies - SoFi's shares have increased by 41% over the past year, driven by strong quarterly results, although they have recently pulled back [7]. - The company currently trades at a premium, with a valuation of 32 times forward earnings, higher than many other fintech stocks like Upstart and Block, which trade for under 20 times [7]. - Despite a recent earnings miss, SoFi reported impressive year-over-year revenue growth of 40% and earnings growth of 160% in the fourth quarter [8].

Core Insights - PayPal Holdings, Inc. is under investigation for potential violations of federal securities laws following a significant earnings miss and subsequent stock price decline [1][5]. Analyst Expectations and Company Communications - On January 28, 2026, Rothschild & Co Redburn downgraded PayPal's price target from $70 to $50, which was followed by Morgan Stanley's similar reduction to $50 on January 29, citing slower checkout growth [2]. - Analysts had anticipated mid-single-digit revenue growth and higher earnings per share just before the earnings announcement on February 2, 2026 [2]. Earnings Results and Guidance - Actual results disclosed on February 3, 2026, showed revenue of $8.68 billion, falling short by $120 million (approximately 1.4%) from the $8.80 billion estimate [3]. - Adjusted earnings per share of $1.23 missed the consensus range of $1.30 to $1.33 by 5.4% to 7.5% [3]. - The company's forward guidance indicated a decline in 2026 transaction margin dollars and an adjusted earnings per share range projecting a low single-digit decline to a slight positive gain, significantly below market expectations [3]. Management Communication - During the third quarter 2025 earnings call on October 28, 2025, management did not indicate any forthcoming dramatic revisions to the company's outlook, raising questions about the information available to them prior to the earnings miss [4]. Stock Performance - Following the earnings announcement on February 3, 2026, PayPal shares dropped 19-20%, reaching approximately $42 and establishing a new 52-week low, with a reported increase in short interest as traders anticipated further declines [5].

Core Insights - PayPal's stock has dropped over 30% in 2026, prompting Senator John Boozman to purchase shares worth between $1,001 and $15,000 shortly before the company reported disappointing earnings and a leadership change [1][2] Financial Performance - PayPal's fourth-quarter 2025 results revealed revenue approximately $300 million below expectations, with adjusted earnings also missing estimates and weak guidance for 2026 indicating limited growth and potential profit declines [4] - Following the earnings report, PayPal's shares fell nearly 20% in a single session, reaching multi-year lows [6] Leadership Changes - The abrupt replacement of PayPal's CEO with former HP executive Enrique Lores has raised concerns regarding the company's execution and growth prospects [6] Market Competition - PayPal is experiencing a loss of market share due to increasing competition from platforms like Apple Pay and Shop Pay [3] Legislative Context - Senator Boozman, who purchased PayPal shares, serves on the Appropriations Subcommittee on Financial Services and General Government, which oversees regulators affecting payment processors, raising suspicions about the timing of his trade [7] Broader Investment Activity - Beyond PayPal, Boozman's disclosures indicate a range of investments in companies such as Visa, Netflix, Exxon Mobil, and Apple, as well as various ETFs focused on energy, commodities, real estate, and bonds [8][9]

Core Insights - PayPal Holdings, Inc. is under investigation for potential violations of federal securities laws, as announced by Levi & Korsinsky [1] - Analysts have downgraded PayPal's price target significantly, with Rothschild & Co Redburn and Morgan Stanley both setting targets at $50, down from $70, due to slower checkout growth [2] - The company's earnings report on February 3, 2026, revealed a revenue of $8.68 billion, which was $120 million short of the expected $8.80 billion, marking a 1.4% miss [3] - Adjusted earnings per share of $1.23 also fell short of the consensus estimate of $1.30 to $1.33, representing a miss of 5.4% to 7.5% [3] - Forward guidance indicated a decline in transaction margin dollars and a low single-digit decline in adjusted earnings per share, which was below market expectations [3] - During the previous earnings call on October 28, 2025, management did not signal any significant changes to the company's outlook, raising questions about the information available to them at that time [4] - Following the earnings miss, PayPal shares dropped 19-20%, reaching a new 52-week low of approximately $42, with increased short interest as traders anticipated further declines [5]

As many other analysts covering PayPal Holdings, Inc. ( PYPL ), I have to admit that my positive call on the stock back in November hasn’t played out as expected so far. That said, the finalI’ve managed my investments since 1999, gaining perspective across multiple market cycles. With a background in Economics and ongoing CFA certification, my focus is on uncovering mispriced assets that the market has overlooked. I conduct my analyses in a way that allows me to use them myself — not just casually handed-ou ...

As many other analysts covering PayPal Holdings, Inc. ( PYPL ), I have to admit that my positive call on the stock back in November hasn’t played out as expected so far. That said, the finalI’ve managed my investments since 1999, gaining perspective across multiple market cycles. With a background in Economics and ongoing CFA certification, my focus is on uncovering mispriced assets that the market has overlooked. I conduct my analyses in a way that allows me to use them myself — not just casually handed-ou ...

🚨 🚨 🚨 🚨 🚨 🚨 1,986 #BTC (137,346,454 USD) transferred from #Paypal to unknown wallethttps://t.co/RkpYOzKMc8 ...

Core Viewpoint - PayPal's stock has fallen 31% as the company faces an execution crisis, highlighted by a significant earnings miss and a leadership change [1] Financial Performance - PayPal reported Q4 revenue of $8.676 billion, missing estimates by $304 million, and EPS of $1.23, falling short by $0.08 [1] - The company's stock is currently trading at $40.46, down 46.79% over the past year, and is near its 52-week low of $38.88 [1] Leadership Change - Enrique Lores has been appointed as the new CEO, effective March 1, 2026, following dissatisfaction from the board regarding the pace of change and execution under outgoing CEO Alex Chriss [1] Market Sentiment - Retail investor sentiment on Reddit has turned sharply negative, with the sentiment score dropping to 37 from a neutral 57.4 over the past month [1] - Daiwa Securities has reduced its price target for PayPal from $61 to $42, reflecting a 31% cut in expectations [1] Competitive Position - PayPal's branded checkout performance has deteriorated, and its defensive Buy Now Pay Later (BNPL) strategy has lost market share to competitors like Affirm and Klarna [1] - Former PayPal President David Marcus criticized the company's current strategy, indicating concerns about its competitive position [1] Future Outlook - Analysts maintain a consensus target price of $51.88 for PayPal, suggesting a potential upside of 27% [1] - PayPal is expected to generate over $6 billion in free cash flow for 2026, with a current P/E ratio of 7.48x, indicating a critical period for the company to prove its turnaround strategy [1]