Should You Buy PayPal (PYPL) Stock Before May 5?
Key Points
PayPal’s growth has slowed to a crawl.
Its stock is cheap, but it might deserve that discount valuation.
PayPal's (NASDAQ: PYPL) stock has declined more than 40% over the past 12 months. Its cooling sales growth, macro and competitive headwinds, and murky plans all dragged down its stock and caused it to underperform many of its fintech peers. Should investors buy PayPal's beaten-down stock before it posts its next earnings report on May 5?
Image source: PayPal.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
What happened to PayPal?
Back in 2021, PayPal declared it would reach 750 million active accounts by the end of 2025. It eventually abandoned that ambitious target, and its total number of year-end active accounts only increased from 426 million in 2021 to 439 million in 2025.
PayPal attributed much of the slowdown to inflationary headwinds on consumer spending, but it also faced stiff competition from other digital payment and fintech platforms. Its involuntary decoupling from eBay (NASDAQ: EBAY), which lasted from 2018 to 2023, exacerbated that pressure.
Over the past year, PayPal's revenue grew by low-to-mid single digits as it struggled to gain new customers, meaningfully increase its transaction volume, and improve its transaction take rate (the percentage of each transaction it retains as revenue).
|
Metric |
Q4 2024 |
Q1 2025 |
Q2 2025 |
Q3 2025 |
Q4 2025 |
|---|---|---|---|---|---|
|
Active Accounts Growth (YOY) |
2% |
2% |
2% |
1% |
1% |
|
TPV Growth (YOY) |
7% |
3% |
6% |
8% |
9% |
|
Payment Transactions Growth (YOY) |
(3%) |
(7%) |
(5%) |
(5%) |
2% |
|
Transaction Take Rate |
1.73% |
1.68% |
1.68% |
1.64% |
1.65% |
|
Revenue Growth (YOY) |
4% |
1% |
5% |
7% |
4% |
Data source: PayPal. YOY = Year-over-year.
PayPal's transaction volumes declined as it relied more heavily on its branded checkout platform, Venmo peer-to-peer payments app, debit cards, and buy now, pay later (BNPL) services to drive its top-line growth. Those core platforms all net higher average payments on fewer total transactions than PayPal's other, higher-volume services.
PayPal has been downsizing one of those higher-volume, lower-value platforms -- its backend payments platform, Braintree -- to stabilize margins and take rates. At the same time, it's been cutting costs and buying back more shares to grow EPS as its sales growth cools.
Should you buy PayPal's stock before May?
For 2026, PayPal expects EPS to decline by the mid-single digits as its branded checkout platform struggles to grow in a market filled with similar payment services. It's trying to offset that pressure by rolling out more offline and online checkout features, but those strategies will drive up its expenses -- and it's unclear if they'll meaningfully widen its moat.
PayPal's stock looks dirt cheap at 8 times this year's earnings, and it might attract some takeover interest from a bigger bank or tech company. However, I wouldn't rush to buy it as a contrarian play before its next earnings report unless a few more green shoots appear.
Should you buy stock in PayPal right now?
Before you buy stock in PayPal, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and PayPal wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,970!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,174,241!*
Now, it’s worth noting Stock Advisor’s total average return is 889% — a market-crushing outperformance compared to 192% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 24, 2026.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PayPal and eBay. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short March 2026 $65 calls on PayPal. The Motley Fool has a disclosure policy.
Related Articles
Nvidia Q4 Earnings Preview: AI-Driven Growth Versus Market Expectations
TradingKey - NVIDIA (NVDA) is set to release its fourth quarter fiscal year 2026 earnings report after the market close on February 25, ET. As the world undergoes a period of rapid AI technological advancement, market debates over a capital expenditure bubble have intensified. In this context, NVIDIA’s results serve not only as a test of its business performance but also as a core bellwether for the sustainability of the global AI boom.
Tesla Stock Outlook: Why 2026 Could Be the Year of the Tesla Robotaxi
TradingKey - The concept of autonomous mobility for Tesla(TSLA) has gone from a projection of the far away future to a vital part of its overall long-term growth strategy.
International Copper Prices Rise for 7 Straight Months; Will Bull Market Continue in 2026?
TradingKey - As the "king of industrial metals," every fluctuation in international copper prices impacts the nerves of global investors. In early 2026, international copper prices continued to rise, extending the upward trend from 2025 and reaching a new high above $14,500, marking seven consecutive months of gains. Meanwhile, London Metal Exchange (LME) copper prices have climbed from $7,800 per tonne in July 2025 to over $9,000 per tonne today.
Is SaaS Dead? The Truth Behind the Software Meltdown, the Missing Floor, and the Peak That’s Not Coming Back
TradingKey - A trillion dollars just vanished from software stocks—this piece breaks down who AI is really killing, who quietly benefits, and why cheap SaaS may be the biggest value trap of this cycle.
