PayPal’s stock slump raises questions about its recovery strategy
PayPal’s stock has struggled over the past year, dropping 33% while the broader stock market rose. The company faces challenges from slower revenue growth, fewer transactions, and shifting strategies to revive its performance. Analysts now suggest potential recovery paths if key financial targets are met.
PayPal’s troubles began with a steady decline in payment transactions over four straight quarters. A drop in its transaction take rate—how much it earns per payment—added to the pressure. The company also fell far short of its 2025 goal of 750 million active accounts, reaching only 438 million by the third quarter of that year.
External factors, like a weak economy, made matters worse. Investors grew concerned as PayPal’s future plans remained unclear. In response, the firm started cutting back on its unbranded payment processing service, Braintree, to focus on more profitable transactions. Analysts still see room for improvement. If PayPal meets Wall Street’s earnings forecasts, its stock could climb around 8% by early 2027. A more optimistic valuation—15 times earnings—might even push shares up over 60%. The company is also rolling out new services and partnerships to lift revenue and transaction fees. This isn’t PayPal’s first setback. In 2018, eBay dropped the platform as its main payment provider, switching to Adyen over five years. Despite these hurdles, analysts project an 11% annual growth in adjusted earnings per share from 2024 to 2027.
PayPal’s stock performance will depend on its ability to reverse transaction declines and improve profitability. A shift toward higher-value payments and new revenue streams could stabilise its position. The coming years will show whether these changes are enough to regain investor confidence.
