As someone who’s always on the hunt for opportunities, I’m still excited about PayPal. With its stock down around 20% year-to-date and trading at about $68 per share (giving it a market cap of roughly $70 billion), it feels like the market is overlooking some strong underlying fundamentals in the space. Analysts are projecting steady growth ahead, and the company’s strategic moves could set it up for a rally similar to what we’ve seen with other tech names, but I wouldn’t be on a 10 bagger for this one!
๐ข Let me break down the details that have me bullish.
Undervalued Stock with Solid Growth Projections: Despite the YTD dip, PayPal remains a powerhouse with over $32 billion in trailing twelve-month revenue. Analysts expect about 4% revenue growth for fiscal 2025 (to around $33 billion) and 6% for 2026 (reaching $35 billion). On the earnings side, EPS is forecasted to rise 12% this year to $5.21 and another 10% next year to $5.74, driven by operational efficiencies and expanding services. At a forward P/E that’s looking cheap compared to peers, this suggests room for significant upside if growth accelerates as expected.
Aggressive Share Buybacks Boosting Shareholder Value: PayPal has authorized a massive $15 billion repurchase program, with $1.5 billion already executed in Q2 2025 alone, reducing diluted shares by about 6.7% year-over-year and boosting EPS by around 7%. Plans indicate up to $6 billion in buybacks through the end of 2025, which could deliver an 11% shareholder yield even without additional growth. This is a clear signal from management that they see the stock as undervalued, and it’s a smart way to return capital while supporting price stability.
Accelerating Business Momentum from Key Segments: The CFO has emphasized an improving growth trajectory, with branded checkout (including PayPal and Venmo) seeing 5-6% growth in total payment volume (TPV), expected to pick up further by year-end and into 2026. Migration to an updated checkout experience is at 60% in the U.S. and mid-teens globally, aiming for 80% by 2027, this should enhance user conversion and drive higher volumes.
“Buy Now, Pay Later” is exploding with over 20% growth, positioning it as a key customer acquisition tool. Meanwhile, Venmo is surging 45% thanks to its mobile-first appeal among Gen Z users, with new features like groups, debit cards, and partnerships targeting 20% revenue growth over the coming years.
Braintree and Value-Added Services as Profit Drivers: PayPal’s unbranded processing arm, Braintree, has been profitable for five straight quarters, with TPV growth set to accelerate to mid-to-high single digits by late 2025 and align with broader e-commerce trends in 2026. Add-on services like risk management and payouts are scaling, with potential to generate $1 billion in quarterly revenue soon.
Transaction margins are guided at 6-7% growth for the year (excluding float), and if e-commerce holds steady, PayPal could beat these conservative estimates, management has a track record of under promising and overdelivering under CEO Alex Chriss. Provided we overlook the ”shock the world” comment lol
Comparisons to Recent Breakouts and Valuation Upside: Think about how SoFi lingered in the $6-10 range for years before exploding higher, or Google’s steady climb on value-added innovations. PayPal’s mix of branded/unbranded payments, mobile focus, and services echoes that potential. Reverse DCF models show that even with flat growth, the stock could be 33% undervalued; at 1% growth, upside jumps to 45%. Analysts’ longer-term forecasts (4-7% annual FCF growth through 2027) imply the market is pricing in a negative growth story, which doesn’t match the reality of improving margins (operating from 18% in 2025 to 20% by 2030) and recovering FCF margins (back to 17-18%).
Overall, this setup screams opportunity still, the market seems fixated on short-term headwinds like e-commerce slowdowns or minor disruptions (e.g., a brief Germany issue that’s already baked into guidance), but the fundamentals point to a turnaround.
I’ve got PYPL in my eToro portfolio, and whilst i admit i was early on building a position, I’m still confident in my analyses. What about you, are you seeing the same potential, or waiting for more catalysts? Let’s discuss in the comments!
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๐ข Growth Metrics:
Year to date: 2๏ธโฃ3๏ธโฃ. 9๏ธโฃ7๏ธโฃ%
2 years: 1๏ธโฃ2๏ธโฃ1๏ธโฃ.5๏ธโฃ6๏ธโฃ%
5 years: 3๏ธโฃ0๏ธโฃ5๏ธโฃ. 1๏ธโฃ%
๐ข Find Me:
โถ๏ธ๐๐ค๐ช๐ฉ๐ช๐๐: @Crafty_Trader
๐: @Crafty_Trader
๐: ๐๐๐๐จ๐๐ฉ๐: www.thecraftytrader.com
https://bullaware.com/etoro/JodySlaney
@JodySlaney with CISI Lvl 3 Wealth & Investment Management
๐ข Disclaimer:
The views expressed above are my personal opinion and do not constitute investment or financial advice.
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